SEOUL (Reuters) - South Korean exports are seen contracting for a fifth straight month in April but at a slower pace, dragged by plummeting shipments to China and as Sino-U.S. trade frictions take their toll on Asia’s fourth-largest economy.
Shipments likely shrank 5 percent in annual terms, a survey of 10 economists showed, extending the contraction that began in December. Exports shrank 8.2 percent on year in March.
Imports this month are seen inching up by a median 0.3 percent from a year earlier, rebounding from a 6.7 percent slide in March and snapping three straight months of decline, the survey showed.
Economists said shrinking exports will likely dent South Korea’s economy over the coming months, already feeling the strain from a slowdown in China, its biggest trading partner, and trade conflicts between the world’s two biggest economies.
South Korea’s economy unexpectedly suffered its worst quarter since the global financial crisis in the January-March period, as companies slashed investment and exports slumped in response to Sino-U.S. trade tensions and cooling Chinese demand, Bank of Korea data showed on Thursday.
Korea’s export-focused economy took a hit from a fifth consecutive month of decline in shipments to China through March.
“Rebound signal in exports yet remains weak,” said Park Sang-hyun, chief economist at Hi Investment & Securities, adding that an extended decline in shipments to China is expected to have a negative effect on trade data.
For the first 20 days in April, South Korea’s overseas sales fell 8.7 percent from a year earlier. By destination, exports to China tumbled 12.1 percent, and are set to fall for a sixth consecutive month.
Analysts forecast the April headline inflation rate at 0.4 percent on year, unchanged from March and remaining far below the central bank’s 2-percent target and an annual-term forecast of 1.1 percent for 2019.
March industrial output is expected to have risen 0.8 percent, recovering from a sharp 2.6 percent decline in February, according to the survey.
March industrial output data will be released at 2300 GMT on Monday. Trade data is scheduled to be published at 0000 GMT on Wednesday, while the inflation figures are expected at 2300 GMT on May 1.
Editing by Shreejay Sinha