South Korea’s exports and imports growth likely dropped below zero in September

South Korea’s exports and imports growth in annual terms is expected to have dropped below zero again in September following a momentary rebound in August, according to Societe Generale. Many factors indicate towards a renewed softness in the annual growth pace. Firstly, a difference in working days, where the number of working days in September would 19 in 2016 as compared to 20 in 2015.

In the meantime, the number of working days in August was at 22 as compared to 20 in 2015. Therefore, a strong year-on-year growth is expected in August and a subdued one in September, added Societe Generale. Secondly, the usual volatility in the shipbuilding sector might have turned unfavorable in September after a positive work in August when ship exports recorded growth of 89.9 percent year-on-year. And lastly, the underlying momentum in trade might not be strong enough to maintain a positive year-on-year growth.

The trade surplus is likely to have increased because of a seasonally pickup in exports. The year-on-year exports and imports growth both are expected to hover around zero until the end of 2016, implying weak momentum in trade, stated Societe Generale.