Weak demand for exports from Europe and the U.S. will slow South Korea’s trade growth in the fourth quarter as the prospect of a global economic downturn dampens forecasts, said the South Korean government.
Asia’s fourth largest economy registered a weaker than expected trade surplus of $1.44 billion last month as exports rose 19.6 percent and imports surged by 30.5 percent year-over-year, according to data released by the Ministry of Knowledge Economy.
“Exports growth in the fourth quarter will slow because of deterioration in external conditions and high-base effect,” the ministry reported. “The trade surplus is unlikely to widen as export conditions weaken from a global economic slowdown while imports are expected to continue growing due to high oil prices.”
Although export-dependent South Korea has traditionally relied heavily on demand from Europe and the U.S., that equation is changing rapidly. Emerging markets accounted for some 70 percent of Korea’s exports in September, with exports to China rising 20.5 percent year-over-year and exports to the Association of Southeast Asian Nations leaping by 43.2 percent.
Government forecasters expect South Korea to record economic growth of 4.5 percent this year, although analysts believe that is overly optimistic.
— Contact Mike King at michael@borderline.eu.com
