South Korea’s exports may rebound in the second half of the year from a falling streak that has lasted more than a year. Recovery in advanced economies and rising global oil prices will help.
Exports from July to December are likely to grow 0.9 per cent from a year earlier compared with an estimated 10.1 per cent drop for the first half of the year.
Shipments have been on a steady decline since January last year on sliding commodity prices, a slowdown in growth in China and a sluggish global economy.
While exports of display components, machinery, semiconductors and textiles will see improvement , those of ships, smart phones and cars are unlikely to notch sharp rebounds anytime soon.
Meanwhile, monetary policy tightening in the United States and accelerated competition from emerging economies remain downside risks for Asia’s fourth-largest economy.
Exports dropped at a faster-than-expected pace of six per cent in May and are likely to be worse this month as 20-day exports notched a 12.8 per cent fall.
South Korea has an export oriented economy and its exports accounts for more than 50 per cent of GDP. Major export partners are China, the United States, Hong Kong, Vietnam, Japan and Singapore. Others include India, Taiwan, Mexico, Australia, Saudi Arabia and Philippines.