© Stocksak. FILEPHOTO: A truck transports boxes at Hanjin Shipping’s Container Terminal at the Busan New Port, Busan, approximately 420 km (261 mi) southeast of Seoul on August 8, 2013. REUTERS/Lee JaeWon/File Photograph
By Jihoon Le
SEOUL (Stocksak), South Korea’s exports dropped in October as a result of a global economic slowdown, rising interest rates and shrinking production, a Stocksak survey revealed on Friday.
According to the median forecast of 11 economists the country’s outbound shipment would have dropped 3.0% in October compared to the same month last year. This is after growth slowed down to a nearly two-year low of 2.7% September.
This would end a 23 month streak of year on year gains since November 2020. The pace of growth is slower than ever since mid-2022. In the past four months, growth rates have fallen to single digits.
Park Sungwoo, an economist at DB Financial Investment, said that “export growth rate is expected turn negative in Oct due to continued impact from weakening worldwide demand for goods and downturning semiconductor cycle and slowdown of shipments into China.”
Exports contracted 5.5% during the first 20 Days of this month. Sales to China – South Korea’s largest trading partner – fell 16.3%. This was on track for a fifth month of declines.
Imports were expected to continue their gains, with 7.2% growth in September. However, this figure would still be significantly lower than September’s 18.6%. It would also be the lowest since January 2021.
They would result in the trade deficit being at its seventh consecutive month of deficit, making it the first annual shortfall since 14 years and the largest ever.
The first day of November will see the release of full monthly trade data.
The survey forecast that the country’s October annual inflation rate would remain flat at 5.6%. It had softened slightly in September, but was still flat at 5.6%. The July rate was 6.3%, which was a new 24-year high.
However, there was some variation in expectations. Five respondents expected the inflation rate to rebound, while three predicted it would remain the same. Three respondents did not expect any change, and three others saw no change.
According to South Korea’s factory output, economists expect that production will have continued its downturn for a further month in September. It will fall 0.3% on a monthly basis after a 1.8% decrease in August.
(This story has been amended to remove the redundant “nearly” in the first paragraph.