Korea's exports set for 10th straight month of growth in August

Korea's exports are expected to have expanded for a 10th straight month, a Reuters poll showed on Monday, supported by robust demand for key items, even as the resurgence in coronavirus weighed on business sentiment.

Outbound shipments in August were seen growing 35.7 percent from a year earlier, the median forecast in a poll of 14 economists showed, accelerating from a 29.6 percent expansion seen in July.

"Exports will be supported by strong imports from advanced economies, memory chip demand, and seasonal demand for certain key items, which will help cushion near-term headwinds from softer regional demand and coronavirus-related supply
disruptions," said Lloyd Chan of Oxford Economics.

Data from last week showed exports for the first 20 days of the month jumped 40.9 percent year-on-year, with those of semiconductors, petroleum products and cars surging 39.8 percent, 55.3 percent and 37.0 percent, respectively.

Economists, however, worry that the impact from the fast-spreading Delta variant across the region may weigh on the manufacturing-heavy economy.

"Export growth may slow gradually going forward, given that the resurgence in Covid-19 may weaken business sentiment and demand for durable goods, and disrupt the supply chain further," said Chun Kyu-yeon, economist at Hana Financial Investment.

Monday's poll also forecast Korea's total imports to have risen 46.4 percent year on year, faster than a 38.1percent increase in July and set for the sharpest growth since May 2010.

Full month trade data will be released on Wednesday.

In the same poll, 15 economists separately predicted that consumer prices this month would rise 2.3 percent from a year earlier, down from a 2.6 percent increase marked in July but still staying above the central bank's 2 percent-target for a fifth month in a row.

Some 10 economists also estimated that industrial output in July would have shrank a median 0.1percent month-on-month, sharply reversing a 2.2 percent expansion seen in June.

Reuters