South Korea export growth slows sharply as US election uncertainty raises risks
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Export growth slowed to a seven-month low from cooling global demand and US election uncertainty.
PHOTO: REUTERS
SEOUL - South Korea’s export growth slowed to a seven-month low in October, missing market expectations, in a sign of cooling global demand and US election uncertainty undermining an already shaky economic recovery.
Outbound shipments from Asia’s fourth-largest economy rose 4.6 per cent from a year earlier to US$57.52 billion (S$76.2 billion) compared with gains of 7.5 per cent the month before and slowing for a third month, official data on Nov 1 showed. A Reuters poll of economists had tipped a rise of 6.9 per cent.
It was the 13th straight month exports grew in annual terms though the increase was the smallest since March.
On average per working day, exports were down 0.2 per cent, 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 Mr 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 US election and the global economic cycle itself,” he said.
South Korean Trade Minister Ahn Duk-geun said the government “is thoroughly assessing the potential impact” of next week’s US 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 per cent as in the prior month, which was the slowest since August 2023.
Exports to China jumped 10.9 per cent to a 25-month high of US$12.2 billion, faster than 6.3 per cent the month before, while those to the European Union were up 5.7 per cent.
Exports of semiconductors were up 40.3 per cent to US$12.5 billion in October, which was lower than an all-time high of US$13.6 billion in September. Sales of cars rose 5.5 per cent, but petroleum products dropped 34.9 per cent as oil prices fell over the year. REUTERS