Advertisement

South Korea October exports seen hit by Samsung, Hyundai; output down for second month - Reuters poll

A driver checks his truck carrying a container at a terminal of an ICD (Inland Container Depot) in Uiwang, south of Seoul, October 1, 2010. REUTERS/Lee Jae-Won

SEOUL (Reuters) - South Korean exports are expected to fall in October in the aftermath of Samsung Electronic Co Ltd's <005930.KS> decision to discontinue its flagship phone and now-ended strikes at Hyundai Motor <005380.KS> that disrupted manufacturing. However, shipments are likely to see a smaller decline than they did in September as global trade conditions improve. The median forecast from a Reuters poll showed exports were expected to slip 3.3 percent in October from a year earlier, compared to a 5.9 percent fall in September. The same poll projected imports would drop 4.6 percent versus a 1.7 percent decline in September. "On a mid-to-long term basis, it's possible to hope trade overall will improve in step with the global economy and from base effects, but high uncertainties looming early next year will make any remarkable improvements unlikely," said Na Jung-hyuk, an economist at Hyundai Securities. Na pointed to the U.S. presidential election and the beginning of Brexit-related negotiations as some of the major risks the economy faces. Repercussions from Samsung's cancellation of its fire-prone Galaxy Note 7 smartphone and worst-ever strikes at Hyundai Motor were widely expected to knock exports in October as cars alone make up around a tenth of South Korea's exports every month. Reflecting some normalisation of global oil prices, the Reuters survey projected inflation in October would probably stand at 1.2 percent, steady from 1.2 percent seen in September which was the highest level since February. Inflation for 2017 could easily reach 1.7 percent and more if global commodity prices keep rising at the current pace, said Lee Sang-jae, chief economist at Eugene Investment & Securities. The central bank currently sees inflation next year at 1.9 percent. The central bank has maintained its stance that price pressures will increase steadily into next year. September factory output is expected to decline for a second month by 0.5 percent versus a 2.4 percent fall in August, the poll found, as fewer working days in the month from a year earlier likely ate into manufacturing. The industrial output data will be published on Oct. 31, while trade and inflation figures are due Nov. 1. (Reporting by Yun Hwan Chae, Jeongeun Lee, Nataly Pak and Dahee Kim; Writing by Christine Kim; Editing by Eric Meijer)