Trade growth in South Korea likely to have recovered on base effects in May

South Korea’s trade figures for May are likely to have recovered considerably. The year-on-year growth in imports and exports are expected to have picked up due to base effects. The trade surplus is also expected to have increased, said Societe Generale in a research report.

“Based on the interim trade data to 20 May, we expect exports to rise moderately from $41.0bn in April to $42.4bn in May, while we are looking for a slight rise in imports from $32.2bn to $32.4bn over the same period”, added Societe Generale.

The recovery in the year-on-year growth in imports and exports are expected to have come from a huge decline in imports and exports in May 2015. The month-on-month non-seasonally adjusted growth was -8.4% in exports and -4.8% in imports. The performance of exports should be seen as ‘stable’ that will underpin the view that the second quarter GDP growth will depend on domestic demand, noted Societe Generale.