By Jihoon Lee
SEOUL (Reuters) – South Korea’s exports likely extended their falling streak to a third straight month in December, a Reuters poll showed on Wednesday, with demand from China yet to recover from loosening COVID-19 restrictions.
The country’s outbound shipments were projected to have fallen 10.1% in December from the same month a year ago, according to the median forecast of 12 economists.
That would be the third straight month of year-on-year declines, after a 14.0% loss in November, which was the biggest in 2-1/2 years, and 5.8% in October.
“South Korea’s exports are under pressure from declining exports to China, where the economy still remains sluggish even after easing of its COVID-19 restrictions, and weak sales of IT products, mainly semiconductors,” said Park Sang-hyun, chief economist at HI Investment and Securities.
“Moreover, global economic slowdown is materialising, so exports are likely to continue the falling trend for the time being.”
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China has eased some of its most stringent restrictions to fight COVID-19 since last month.
During the first 20 days of December, South Korea’s exports shrank 8.8% from the same period a year ago. Those to China dropped 25.5%, outweighing gains in U.S. and EU-bound shipments, in likely the seventh consecutive falling month.
Meanwhile, imports were expected to have fallen at a much milder pace of 0.6% in December, after a 24-month gaining streak through November.
Altogether, the trade balance is set to remain in deficit for a ninth consecutive month. It is also on track for the first annual shortfall in 14 years and the largest-ever.
Full monthly trade data is scheduled for release on Sunday, Jan. 1, at 9 a.m. (0000 GMT).
The survey also forecast the country’s consumer price index for December to be 5.0% higher than a year ago, the same as in November, when the annual inflation rate hit a seven-month low.
On factory output, economists expected production to have fallen 0.8% on a seasonally adjusted monthly basis, which would be slower than 3.5% in October and the slowest in likely its five-month falling streak.
(Reporting by Jihoon Lee in Seoul, polling by Dhruvi Shah in Bengaluru; Editing by Stephen Coates)