Korea Eximbank Overseas Economic Research Institute (keri.koreaexim.go.kr) forecasts that Korea’s exports would continue to decrease in the fourth quarter, by 5% year-on-year.

According to the Bank's 4Q 2012 Export Forecast Report, a delay in the recovery of exports is expected since the Leading Export Indicator*, the benchmark for determining the economic outlook in the export sector, marked a fall compared to the previous quarter.

* The Leading Export Indicator is a composite index used to predict the outlook for the export sector by comprehensively analyzing variables that influence Korea's exports such as the economic conditions of major export markets, prices of export items, the export outlook of different industries, and sales forecasts of companies.

A representative of the Bank expected, “The Leading Export Indicator fell by 0.2% compared to the same period in the previous year, because of the persistent recession in Europe and Japan, slowdowns in the U.S and developing countries, decreases in export unit prices due to fierce competition, a decline in price competitiveness due to the appreciation in the value of the won and slumps in the semiconductor and ship-building industries. The fall in the Leading Export Indicator and the number of business days will mean a negative growth rate in exports. However, the contraction will be by a modest 5%, close to the 5.6% of the third quarter, thanks to the economic stimulus in the U.S. and China.”

* Quarter-by-quarter changes in the Leading Export Indicator: △0.9% (1Q 2012) → 0.8% (2Q 2012) → 0.8% (3Q 2012) → △0.2% (2012 4Q)