South Korea's export weakness likely to continue and imports to fall further in September

South Korea's weakness in exports is likely to continue in September, with only a modest recovery from the significant decline in August. Based on interim data up to 20 September, it is expected that exports will rise from $39.2bn in August to $42.5bn in September, which will not signal a strong recovery given seasonal factors and the likely normalisation of the shipbuilding sector after the delivery cancellation. 

Imports are likely to fall from $35.0bn to $33.5bn, which is also worrying for the growth outlook although it should be partially due to the decline in energy prices and other commodity prices. The trade surplus should jump considerably, as imports should be weaker than exports.