South Korea export growth seen rebounding in May; inflation tops 5%

South Korean export growth is expected to have rebounded in May, but the trade balance likely remained in red, while consumer inflation is seen rising above 5% for the first time in nearly 13 years, a Reuters poll showed on Monday.

Outbound shipments were seen 19.3% higher in May than a year earlier, according to a median forecast of 19 economists, accelerating from a revised 12.9% annual growth seen in April and ending two months of slowdown.

Although South Korea’s economy is still under pressure from China’s COVID-19 lockdown measures and the Ukraine crisis, economists attributed the growth to the calendar effect of two more working days and a recovery in shipments to China.

In the first 20 days of this month, the country exported 6.8% more to China than in the same period a year earlier. Full-month exports to China in April were down 3.4%.

Imports were seen outpacing exports by growing 31.9%, according to the survey, also accelerating from 18.6% seen in April to the fastest rise in four months.

The country’s trade balance was projected as a $2.59 billion deficit, a median of 16 forecasts showed, following a $2.5 billion deficit in the previous month.

Trade data will be released on June 1 at 9 a.m. (0000 GMT).

Meanwhile, the consumer price index for May was forecast to stand 5.1% higher than a year earlier, according to a median forecast by 21 economists, speeding up from a 4.8% rise seen in April and hitting the fastest rate since September 2008.

Industrial output was forecast to post a seasonally adjusted 1.2% decline in April from the previous month, after six straight months of expansion.