South Korea's Export Growth Slows Amid Weakening Global Demand

South Korea's Export Growth Slows Amid Weakening Global Demand

South Korea’s export growth is anticipated to decline for the third consecutive month in October, reflecting cooling global demand for computer chips. A recent Reuters poll, conducted between October 24 to 29, forecasts outbound shipments from Asia's fourth-largest economy to increase by 6.9% year-on-year. This figure, while indicating continued growth, is lower than September's 7.5% and marks the slowest rate since June.

Chun Kyu-yeon, an economist at Hana Securities, noted that “export growth has likely entered a slowing trend” as IT demand wanes, coupled with subdued interest in non-semiconductor exports. South Korea, recognized for being the first major economy to release monthly trade figures, is set to publish its October data on November 1 at 9 a.m. (0000 GMT).

The third quarter showed minimal growth for the economy, primarily due to reduced semiconductor exports to the United States. Analyst Oh Suk-tae from Societe Generale highlighted that a continued slowdown in the semiconductor sector could negatively impact the overall economic outlook.

In the first 20 days of October, exports dropped 2.9%, with shipments to the U.S. and the European Union declining by 2.6% and 8.9%, respectively. However, exports to China experienced a slight increase of 1.2%. Park Sang-Hyun from iM Securities remarked on the anticipated slowdown in U.S.-bound shipments and weaker-than-expected recovery for shipments to China.

Imports are expected to rise 2.0% in October, following a 2.2% increase in September. The trade balance for this month is projected to show a surplus of $4.23 billion, down from $6.66 billion in September.