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S.Korea exports seen growing for 14th month in December – Reuters poll

Randy Mancini 15 December 28, 2021
FILE PHOTO: A truck drives between shipping containers at a container terminal at Incheon port in Incheon
FILE PHOTO: A truck drives between shipping containers at a container terminal at Incheon port in Incheon, South Korea, May 26, 2016. REUTERS/Kim Hong-Ji

December 29, 2021

SEOUL (Reuters) – South Korean exports likely grew for a 14th straight month in December on year-end holiday demand for chips and petrochemical goods, while inflation is expected to remain near a decade high, a Reuters poll showed on Tuesday.

December exports in terms of value were seen expanding 22% from a year earlier, slowing from a 32% jump in November, according to the median forecast of 13 analysts.

“December shipments are expected to exceed $60 billion in value as demand is strong even as chip prices are declining, and petrochemical products are also enjoying record demand,” said Ye-in Kim, an analyst at Korea Investment & Securities.

The nation’s trade ministry said on Dec. 13 annual overseas shipments had reached a record high as of early December this year, supporting an economy that has relied on exports to underpin growth as social-distancing curbs to combat COVID-19 hurt domestic demand.

Tuesday’s poll showed imports were seen growing 35.8% from a year earlier in December, also slowing from a 43.6% surge in November.

The full-month trade data will be published on Saturday at 9 a.m. local time (0000 GMT).

Analysts expect South Korea’s consumer inflation at 3.6% in December, remaining above the central bank’s 2% target for a ninth month in a row.

“CPI inflation likely to exceed 2% until the third quarter of next year, and that would justify an additional rate hike by the Bank of Korea from fundamental perspective,” said Lee Seung-hoon, an analyst at Meritz Securities.

On Dec. 16, Governor Lee Ju-yeol said he sees the increasing threat of inflation taking hold in Asia’s fourth largest economy, leaving the door open for an interest rate hike as early as January.

Median estimate of 14 economists also showed industrial output in November rose 2.5% from October.

(Reporting by Cynthia Kim, Devayani Sathyan, Jihoon Lee; Editing by Vinay Dwivedi)