S.Korea July exports rise at faster pace, but risks to outlook grow

A truck carrying a delivery container travels previous cranes at Pyeongtaek port in Pyeongtaek, South Korea, July 9, 2020. REUTERS/Kim Hong-Ji/File Photograph

SEOUL, Aug 1 (Reuters) – South Korea’s exports grew at a quicker annual tempo in July as sturdy demand from the USA offset weak gross sales to China, although the commerce and broad financial outlook was clouded by slowing world progress amid quickly rising borrowing prices.

Outbound shipments rose 9.4% in July from a 12 months earlier to $60.70 billion, matching the forecast in a Reuters ballot, commerce ministry knowledge confirmed on Monday, after a 5.2% rise within the earlier month.

The stronger exports progress gives some reduction to policymakers, as a worldwide shift in direction of tighter coverage to struggle inflation has stoked worries a couple of steep financial downturn.

“There have been worries of a steep slowdown, however because of excessive export costs and stable demand from the USA, the export progress managed to proceed an honest pattern, particularly contemplating fewer working days,” mentioned Park Sang-hyun, chief economist at HI Funding and Securities.

“Nonetheless, setting apart the demand from the USA, outlook for Europe doesn’t appear as vivid, and China’s economic system will not be recovering as strongly as anticipated, which can maintain the expansion price within the single-digit degree in the interim.”

The Worldwide Financial Fund final week warned that draw back dangers from excessive inflation and the Ukraine battle had been materializing and will push the world economic system to the brink of recession if left unchecked. learn extra

The newest commerce figures from Asia’s fourth-biggest economic system confirmed exports grew 14.1% on common per working day, as there was one fewer working day in July from the identical month a 12 months earlier.

Imports gained 21.8% to $65.37 billion, quicker than 19.4% a month earlier and 20.7% seen within the survey.

The consequence was a $4.67 billion commerce deficit, marking the most important in six months and fourth straight month-to-month deficit in a row.

Shipments to the USA gained 14.6% from a 12 months earlier, following 12.2% rise in June, to the most important month-to-month quantity on document. Exports to the European Union additionally added 14.6%, a welcome signal for Korea’s globe-trotting producers going through stress from a slowing world economic system.

Nonetheless, the headwinds to Europe’s economic system have intensified and a few anticipate a light recession in the course of the second half of the 12 months.

And, abroad gross sales of South Korean items to China fell for a second month by 2.5%, amid fallout from COVID-19 outbreaks in latest months.

By merchandise, exports of semiconductors grew 2.1%, petroleum merchandise surged 86.5%, and automobiles superior 25.3%.

Reporting by Jihoon Lee; Modifying by Shri Navaratnam

: .