South Korea’s decreasing export growth slowed in February to 4% (average: 8.70%), its weakest rate since November 2016 due to decreasing overseas demand and New year holidays that reduced the amount of working days and shipment for the automotive industry. As strong global demand remains, we are expecting South Korean March exports data to approach the 6% range but strong tariff headwinds on steel from second commercial partner (US) and estimated at 53% will be impacting South Korean export industry growth in the coming periods. South Korea remains US third steel supplier with a total amount of 3.6 million tons of steel, after Canada and Brazil.
South Korean February Trade Balance is given at USD 3.31 billion (average: USD 2.88 billion) and will be heading higher, supported by higher exports, stable inflation (4Q: 1.50%), improving private consumption (e.g. expansionary fiscal stimulus) and Bank of Korea’s cautious normalization measures (Repo Rate maintained at 1.50% since November 2017).
By Vincent Mivelaz