South Korea export growth seen slowing in March

Seoul

SOUTH Korea's exports are expected to have slowed in March, while consumer inflation likely held at a decade-high as China's lockdown curbs and the Ukraine crisis weighed on supply chains and added to cost pressures, a Reuters poll showed on Wednesday (Mar 30).

Outbound shipments in March were seen increasing by 17.5 per cent from a year earlier, according to the median forecast of 23 economists, while imports were expected to rise 27.8 per cent.

"We expect headline export growth to continue moderating amid a gradual downturn in global manufacturing," said Kathleen Oh, Bank of America securities economist. "Demand, especially from the Big Three trading partners, China, United States and Europe, likely weakened on (China) lockdowns and downward pressure on sentiment from the Ukraine crisis."

Most economists also saw the country's trade swinging back to a deficit for the month as rising oil and gas prices pushed up imports, outpacing export growth.

"IT and steel, petrochemical products are in the lead, but we will see the trade deficit continuing into March as higher oil prices feed into domestic oil import prices," said Lee Seung-hoon, a chief economist at Meritz Securities.

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On Tuesday, China tightened its first phase of a 2-stage Covid-19 lockdown at the financial hub of Shanghai, asking some residents to stay indoors unless they are getting tested.

In the same Reuters poll, economists projected the consumer price index in February would rise 3.8 per cent from a year earlier, matching the decade-peak logged in November. It increased 3.7 per cent in February.

That would mark the sixth month of inflation exceeding 3 per cent.

Wednesday's poll also showed 18 economists gave median estimates of a 4.5 per cent increase in industrial output in February from a year earlier. REUTERS