SEOUL (Reuters) - South Korea’s export growth was expected to slow to a near halt in June, a Reuters poll found on Wednesday, weighed down by an escalating trade fight between the United States and other major economies even as the weaker won supported overseas sales.
The median forecast from a survey of 10 analysts was for June exports to gain a mere 0.4 percent from a year earlier. Responses ranged from a 2.5 percent fall to a 4.3 percent jump.
Imports were projected to gain 11.4 percent this month in annual terms, the poll showed.
Lim Hye-youn, an economist at Daishin Securities, said the retaliatory imposition of tariffs by the United States and China, as well as the European Union, must have weighed on trade sentiment in June, limiting export growth even with 1 1/2 more working days than June 2017.
In May, a half-day more working time versus May 2017 helped exports rebound in annual terms after shipments fell in April for the first time in 18 months.
“Export growth for the second half is likely to slow down significantly from an average of 8.1 percent between January and May this year,” Lim said.
“The trade dispute issue is a growing downside risk for exports, and economic recovery in non-U.S. countries could weaken and shrink global trade volume.”
Washington is drafting curbs that would restrict Chinese companies from investing in high-tech U.S. firms, another escalation of the Trump administration’s trade dispute with China.
Policymakers worry that South Korea’s exports to China, its biggest trading partner, could suffer from any decline in U.S.-China trade because a large chunk of Korean exports to China are intermediate goods used in products assembled for sale elsewhere.
Lee Seung-hoon, an analyst at Meritz Securities, said there was also a statistical base effect from particularly strong export growth in June 2017, when South Korea won major shipbuilding contracts.
Wednesday’s poll showed annual inflation was seen at 1.7 percent in June, up from 1.5 percent in May.
May factory output was forecast to rise 0.1 percent from April when it jumped 3.4 percent.
The industrial output data is due on Friday, while the trade data will be published on Sunday. The inflation figures are set for publication on July 3.
Reporting by Cynthia Kim and Joori Roh; Additional reporting by Yuna Park and Jeongmin Kim; Editing by Eric Meijer