International Demand

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

A truck carrying a shipping container drives past cranes at Pyeongtaek Port in Pyeongtaek, South Korea, July 9, 2020. REUTERS/Kim Hong-Ji/File Photo

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SEOUL, Aug 1 (Reuters) – South Korea’s exports grew at a faster annual pace in July as strong demand from the United States offset weak sales to China, although the general trade and economic outlook were overshadowed by slowing global growth amid rapidly rising borrowing costs. .

Outbound shipments rose 9.4% in July from a year earlier to $60.70 billion, matching a Reuters poll forecast, Commerce Department data showed on Monday. , after rising 5.2% the previous month.

Stronger export growth is bringing some relief to policymakers, as a global shift towards tighter policy to fight inflation has fueled concerns of a sharp economic slowdown.

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“There were fears of a sharp slowdown, but thanks to high export prices and strong demand from the United States, export growth managed to continue a decent trend, especially given the reduced number of working days,” Park said. Sang-hyun, chief economist at HI. Investment and securities.

“However, aside from demand from the United States, the outlook for Europe does not look as bright and the Chinese economy is not recovering as strongly as expected, which will keep the growth rate in single digits for the moment.”

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Latest trade figures from Asia’s fourth-largest economy showed exports rose 14.1% on average per working day as there was one fewer working day in July compared with the same month a year earlier .

Imports rose 21.8% to $65.37 billion, faster than 19.4% a month earlier and 20.7% seen in the survey.

The result was a trade deficit of $4.67 billion, marking the largest in six months and the fourth consecutive monthly deficit.

Shipments to the United States rose 14.6% from a year earlier, after rising 12.2% in June, to the highest monthly amount on record. Exports to the European Union also rose 14.6%, a welcome sign for globetrotting Korean manufacturers facing pressure from a slowing global economy.

However, headwinds weighing on the European economy have intensified and some expect a mild recession in the second half of the year.

And, overseas sales of South Korean products to China fell 2.5% for a second month, amid fallout from COVID-19 outbreaks in recent months.

By product, exports of semiconductors increased by 2.1%, petroleum products by 86.5% and cars by 25.3%.

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Reporting by Jihoon Lee; Editing by Shri Navaratnam

Our standards: The Thomson Reuters Trust Principles.