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South Korea's July exports set for fifth month of double-digit growth

07/29/2021 | 12:36am EDT
Hanjin Shipping's container terminal is seen at the Busan New Port in Busan

SEOUL (Reuters) - South Korea's exports likely eased in July on a fading base effect from last year's trade slump, a Reuters poll showed on Thursday, though robust overseas demand for key items will help extend the double-digit growth.

Outbound shipments in July were seen expanding 30.2% from a year earlier, the median forecast in a poll of 16 economists showed, supported by strong demand for South Korean semiconductors, cars, and petroleum products.

That would be slower than the 39.8% surge marked in June, but export growth expanded in July for a ninth consecutive month.

"The pace of export growth would slow as the base effect wears off, but the growth would remain at double-digit on strong demand from major economies," Kiwoom Securities' economist Kim Yu-mi said.

Strong sales in IT, auto, and chemical sectors might have towed the growth, Lee Seung-hoon, a chief economist at Meritz Securities said, adding that a further expansion in global manufacturing PMIs imply additional demand from abroad.

Business activity in the euro zone expanded at its fastest monthly pace in more than two decades, while that in the United States also continued its expansion in July, surveys showed.

Reuters poll on Thursday also forecast South Korea's total imports to have risen 42% year-on-year, faster than a 40.7% increase in June and set for the sharpest growth since May 2010.

"We would welcome the jump in imports as a sign of normalisation in economic activity (both domestic demand and exports), although it may partially be explained by the rise in commodity prices," Societe Generale economist Oh Suk-tae said.

Full month trade data will be released on Sunday at 9 a.m. local time (0000 GMT).

In the Reuters poll, 17 economists separately predicted June industrial output to likely edge up by a seasonally adjusted 1% month-on-month, rebounding from a 0.7% fall in May.

Some 12 economists also estimated that consumer prices this month would rise 2.4% from a year earlier, hovering near a nine-year peak and steady from a 2.4% rise marked in June.

(Editing by Sherry Jacob-Phillips)

By Joori Roh and Jihoon Lee

© Reuters 2021
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