Export Growth Tracking Firmer, But Trade Deficit Re-widens

The first 20-days of October trade data continues to suggest an improving external demand backdrop. Headline exports rose 4.6% y/y. This compares with the first 20-days of September, which printed +9.8% y/y. Still, in daily average terms, exports were up 8.6% y/y. This is a sharp turnaround on the daily average for the first 20-days of September, -7.9%.

• Base effects played a role, but still, it continues to suggest further improvement in y/y momentum export growth. The chart below overlays the 20-day daily average export growth against full month export growth for South Korea.
• Less drags were evident from two headwinds that have been present on the export side. China exports fell -6.1% y/y, versus -9% y/y for the prior read. Chip exports were down -14.1% y/y in the first 20-days of September but this metric now stands -6.4% y/y.
• Exports to the US remained positive at +12.7% y/y, albeit down from the prior heady pace.
• On the import rise, we rose 0.6% y/y, up from the prior -1.5% pace.
• The trade deficit re-widened to -$3.75bn against a prior (-$489mn). We do tend to see improvement in the trade position in the final 10days of the month, although the rebound in global energy prices is likely weighing on the country's overall position.

Fig 1: Export Growth Recovered Further In October