S.Korea export growth slows sharply; US election uncertainty raises risks
10:18 pm Thursday, October 31st, 2024
By Jihoon Lee
SEOUL (Reuters) -South Korea’s export growth slowed to a seven-month low in October, missing market expectations, in a sign cooling global demand and U.S. election uncertainty are undermining an already shaky economic recovery.
Outbound shipments from Asia’s fourth-largest economy rose 4.6% from a year earlier to $57.52 billion, compared with gains of 7.5% the month before and slowing for the third month, official data on Friday showed. A Reuters poll of economists had tipped a 6.9% rise.
It was the 13th straight month exports grew in annual terms though they were the smallest increase since March.
On average per working day, exports were down 0.2%, their first fall since September 2023.
The trade data aligns with a survey showing South Korea’s factory activity shrank for a second month in October, with output falling by the most in 16 months.
The trade-reliant economy barely grew in the third quarter, despite signs of recovery in consumer spending, as exports weakened, raising the chance for more stimulus to support growth.
“Exports are slowing down,” said Stephen Lee, chief economist at Meritz Securities.
“We had expected some support from industrial materials amid lower interest rates and a recovery in the global manufacturing sector, but it seems the recovery is being delayed due to heightened uncertainty over the U.S. election and the global economic cycle itself,” Lee said.
Trade Minister Ahn Duk-geun said the government “is thoroughly assessing the potential impact” of next week’s U.S. election on each sector taking into account every possible scenario.
Shipments to the United States rose for the 15th straight month, at the same pace of 3.4% as in the prior month, which was the slowest since August 2023.
Exports to China jumped 10.9% to a 25-month high of $12.2 billion, faster than 6.3% the month before, while those to the European Union were up 5.7%.
Exports of semiconductors were up 40.3% to $12.5 billion in October, which was lower than an all-time high of $13.6 billion in September. Sales of cars rose 5.5%, but petroleum products dropped 34.9% as oil prices fell over the year.
Imports rose 1.7% to $54.35 billion in October, after gaining 2.2% in September, also weaker than a 2.0% rise expected by economists.
The country posted a monthly trade surplus of $3.17 billion, less than half the previous month’s $6.66 billion.
(Reporting by Jihoon Lee; Editing by Jacqueline Wong and Shri Navaratnam)
