Exports seen on a rebound after a tough 2019Korea’s exports will likely rebound as early as February, analysts said Thursday, citing a global economic recovery and improving conditions in China.
The country’s outbound shipments have shown a turnaround since the fourth quarter of 2019, with the pace of decline slowing to 16 percent, 12.4 percent and 1.4 percent in October, November and December, respectively, according to data from the Ministry of Trade, Industry and Energy.
Overall, exports by Asia’s fourth-largest economy fell 10.3 percent in 2019 after setting a record-high performance the year before, due mainly to a slump in the global chip market coupled with the trade feud between the world’s top two economies.
The country’s outbound shipments came to $542.4 billion last year, compared with $604.8 billion posted a year earlier, according to the data compiled by the Trade Ministry.
Jeong Sung-tai, an analyst at Samsung Securities, expected the country’s monthly exports to turn around a year earlier.
“The global economic recovery will boost trade, and exports will get a boost from a recovery in the chipmaking industry and the increasing stability in the Chinese economy,” Jeong said, estimating the global economy will grow 3.5 percent in 2020.
The country’s exports to China, its top trading destination, grew 3.3 percent in December, marking the first uptick in 13 months.
The improvement was in line with positive indices in China.
China’s Caixin Purchasing Managers Index, a key gauge of activity in the country’s factories, rebounded to 51.8 in November, marking the fastest expansion since December 2016. A reading above the 50-point mark indicates expansion, while a reading below the 50-point mark signals contraction.
“There has been widespread optimism that the United States and China will sign the first round of their trade agreement in January,” Oh Jae-young, an analyst at KB Securities, said.
Oh estimated the country’s exports will grow 2.5 percent.