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South Korea economy still wobbly as April exports seen tumbling, output soft: poll
[SEOUL] South Korea's exports in April are expected to have suffered double-digit declines as global demand showed few signs of turning a corner while less working days in the month compared to a year ago also hurt the final numbers.
Exports from Asia's fourth-largest economy are seen down 11.0 per cent this month from a year earlier, according to the median forecast in a Reuters survey, extending a slump that began in January last year.
South Korea and other key export-reliant economies in Asia, including Japan, Taiwan and Singapore, have been hit hard by a global downturn in demand that's prompted a scramble among policymakers to restore momentum.
Slowing growth in China, Korea's biggest export market, is seen as a major reason for the falling shipments across the region. There might be some light at the end of the tunnel though.
"As global trade volume keeps falling this will likely stunt our export growth, but in April we saw some positive indicators out of China," said Kim Doo-un, economist at Hana Financial Investment. "We may see some improvement from that end, in terms of IT products and cosmetics." China posted its slowest economic growth since 2009 in the first quarter, data showed earlier this month, but other activity indicators were better than expected thanks to a surge of new debt there.
April this year had 22.5 working days, compared to 24 days in the same month last year.
The Reuters poll predicted imports to be down 12.5 per cent in April.
The same survey forecast March industrial output to have edged up a seasonally adjusted 0.1 percent on-month, slowing from a 3.3 per cent gain in February which was the fastest growth in 6-1/2 years.
Lee Sang-jae, chief economist at Eugene Investment & Securities, said factory output probably benefited from new smartphone and car releases. However, it would be premature to say the economy is on track for a strong rebound given the still-weak external trade picture.
April inflation is expected at 1.0 per cent on-month, unchanged from March, the polled showed, underpinned by a bounce in global oil prices and gains in housing costs as more South Koreans tend to move as the weather gets warmer in spring months.
That would still leave inflation lower than the central bank's target of 2 per cent.
March industrial output data will be released on April 29 while April trade numbers are to be announced May 1. April inflation data will be published May 3.