Economy9 hours ago (Feb 25, 2022 12:13AM ET)
© Reuters. 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/File Photo
SEOUL (Reuters) – South Korea’s exports likely increased for a 16th month in February, and at a faster pace, a Reuters poll showed on Friday, though Russia’s invasion of Ukraine may further disrupt the global supply chain and add more cost pressures.
Outbound shipments in February were expected to increase by 18.2% from a year earlier, according to the median forecast of 11 economists, while imports were expected to rise 25.2%.
“We expect a solid growth in sales of key exporting items, including semiconductors, but with a continued rise in oil prices, the trade balance will remain in the negative territory,” said Park Sung-woo, an analyst at DB Financial Investment.
The economy reported a $4.83 billion trade deficit in January, as imports increased by 35.3%, outpacing a 15.2% rise in exports.
Economies around the world have suffered from a global chip supply shortage and other production bottlenecks because of the rapid spread of the highly infectious Omicron variant of the coronavirus.
The supply chain disruption from the Russia-Ukraine conflict is seen limited for now, but it could pose further risks in longer term, with the chip industry taking a hit.
The full-month trade data will be published on Tuesday at 9 a.m. (0000 GMT).
In the same Reuters poll, economists projected the consumer price index in February would rise 3.5% from a year earlier, slower than in January but not far from a decade-high 3.8% rise in November.
That would mark the fifth month of inflation above 3%.
The Bank of Korea sharply upgraded its inflation forecast for 2022 to 3.1% from 2% and signalled the bank may need a quicker pace of tightening should price pressures build further because of the Ukraine crisis.
On Thursday however, the bank kept the base rate steady at 1.25% to gauge the impact of its back-to-back hikes before raising again.
Friday’s poll also showed eight economists gave median estimates of a 0.6% decrease in industrial output in January from December.
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