South Korean exports likely to have recovered significantly in June

South Korea’s exports are likely to have rebounded considerably in dollar terms and also on year-on-year growth basis. On the basis of interim trade data available till June 20, the country’s exports are expected to have soared to USD 45 billion in June from May’s 39.8 billion.

The year-on-year growth in exports is estimated to have come in at -3.3 percent in June, as compared with -6 percent in May, said Societe Generale in a research report. The anticipated rise in exports is not just because of the differences in working days as June had 21 working days, while May had 20.

Moreover, the expected year-on-year growth would not be from base effects as exports grew significantly between May and June last year. Meanwhile, imports are likely to have risen to USD 33.8 billion in June from USD 32.8 billion in May. This might not be seen as a considerable rise due to the difference in working days. The trade surplus is expected to have increased to a historical high level of USD 11.2 billion, according to Societe Generale.

The recovery in exports would be positive for the South Korean growth outlook. However, the growth is expected to be mainly driven by domestic demand in the second half of 2016.