SEOUL: South Korea’s exports are likely to have decelerated considerably in July on year-on-year basis and in terms of dollar. Exports are expected to have declined to USD 41.2 billion in July from USD 45.3 billion in June, based on the interim trade data, stated Societe Generale in a research report. The growth is likely to have contracted to -9.8 percent on year-on-year basis from -2.7 percent.
The drop in exports is partly because of the usual fluctuation in the shipbuilding sector due to the delivery schedule, anticipates Societe Generale. In June, exports of ships reached USD 5.1 billion, quite higher than the 12-month average of USD 3 billion. Thus, just returning to the 12-month average might lower the overall exports by approximately USD 2 billion. Other sectors are also likely to have experienced some weakness. The auto sector, for instance, is likely to have shown weakness because of a strike at a huge auto factory.
On the other hand, imports are likely to have grown slightly to USD 34.2 billion from USD 33.8 billion. However, the year-on-year growth is expected to have dropped to -11.5 percent from -7.7 percent because of negative base impacts, according to Societe Generale. South Korea’s trade surplus is expected to have declined as imports are likely to be firmer than exports.
