SEOUL: South Korea’s exports likely fell for a 12th straight month in December, a Reuters survey found, as demand from emerging market economies and China remained poor and global oil prices stayed low.
The median forecast from 15 economists is for South Korean exports to fall 10.9% in December in dollar terms from a year earlier, slumping from a 4.8% decline in November. Such a decline, however, would not be as severe as the 16% fall reported in October, the sharpest contraction in six years.
“South Korea will keep managing a trade surplus on suffering imports, indicating sustained weakness in the economy,” said Lee Sang-jae, chief economist at Eugene Investment & Securities in Seoul. “Also, when considering global oil prices fell more in December, it’s unlikely that exports will become sharply better in early 2016.”
The economists’ forecast also projected a 18.6% drop for imports in December, worse than the 17.6% fall reported in November. South Korea will be the first major trading country in the world to publish December export figures on Jan 1 and the results may show the global economy remaining sluggish in the new year.
The same survey showed industrial output likely lagged for a second straight month in November, falling 0.5% from a month prior in seasonally adjusted terms, as poor export demand offset the recovery in local consumption. Industrial output fell a preliminary 1.4% in October in monthly terms as weak external demand curbed manufacturing activity.
Meanwhile, annual inflation likely accelerated for a third month in December, climbing to 1.1% from a year earlier, the Reuters survey showed. This would be the fastest pace of consumer price increase seen since October 2014.
Inflation stood at 1% in November and is expected to continue rising in 2016 as base effects from low global oil prices fade, analysts said. However, analysts expect inflation to be gradual next year, in line with the Bank of Korea’s projections. Industrial output data will be published Dec 30 and inflation data will be published Dec 31.
