The KEXIM Overseas Economic Research Institute forecast that Korea’s exports would increase 3% year-on-year in the second quarter, recovering from the first quarter’s trough in exports.

According to the Bank's 2Q 2012 Export Forecast Report, the lead export indicator* marked an upward trend for the first time in three quarters, indicating a higher chance of recovery in exports.

* The lead export indicator is an index used to predict changes in exports by compiling factors that export performances, such as economic conditions in importing countries, price competitiveness and export prices, as well as export forecasts per industry and corporations.

A representative of the Bank commented, “Despite economic slowdowns in BRICs and developing countries, the lead export indicator, which had posted declines for two consecutive quarters, increased 0.6% from the same period last year as a result of increasing composite leading indicators of developed countries such as the US and Japan and improved profitability in the IT sector that resulted from higher semiconductor order and shipment rates. Export growth in the second quarter will be similar to that of the first quarter due to the base effect* of 2011 2Q exports, when quarterly exports peaked.”

* Quarterly comparisons of lead export indicators (%): 0.9% (2011 3Q) → △0.2% (2011 4Q) → △1.8% (2012 1Q) → 0.6% (2012 2Q)

* End value calculations are distorted by relative positions of the time of reference; when the economy is referenced against a period of economic boom, economic indicators suggest slower recovery.

On a related note, the Bank's Export Industry Forecast for the Second Quarter, a survey of Korean export firms, recorded 112, up from 99 last quarter, suggesting optimistic sentiments in exports.