SEOUL: South Korea’s exports were expected to rise for an eighth straight month in June, a Reuters poll showed on Wednesday, as global demand for memory chips and shipbuilding continued to support foreign trade.
The median forecast of the 10 analysts polled was for exports to rise 17.1% from a year earlier, versus 13.3% growth in May. Imports were seen growing 19.5% after jumping 19.1% a month earlier.
“June may be the peak of the export surge this year, in terms of monthly expansion and average shipments per working day,” said Lee Sang-jae, chief economist at Eugene Investment and Securities.
“The economy is in a stable recovery cycle thanks to robust exports and improving sentiment at households and businesses. Problem is, sliding global oil prices and commodities could slow export growth in the second half,” Lee said.
Exports of semiconductors and petrochemical products in May soared 56.2% and 30.2%, respectively, from a year earlier, as demand especially from China, Australia and Taiwan remained strong, data from the Korea Customs Service showed.
An eight-month stretch of export growth should give the Bank of Korea confidence that its five-year easing cycle is over, especially as consumer sentiment at more than six-year highs also points to a stronger private consumption.
South Korea’s consumer sentiment improved for a fifth straight month in June, reaching a six and a half-year high, a central bank survey showed on Tuesday, as respondents became more optimistic about the economy.
The same poll showed that June annual inflation was expected to be 2%, on par with May.
“With the ongoing drought, gains in agricultural product prices probably were offset by declining energy prices,” Park Ok-hee, economist at IBK Securities said in Seoul.
May factory output was forecast to increase 1.5% from a month earlier after falling 2.2% in April.
Industrial output data is due on Friday, and trade data will be published on Saturday. Inflation indicators will be released on July 4. - Reuters
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