South Korea: Consumer Prices Slide

Elliott Wave International's Global Market Perspective has been keeping subscribers on top of economic and deflationary developments in Asia. The January issue noted:

South Korea is the world's leading exporter of computer chips, ships, cars and petroleum products. In December, its exports to China fell 13.9%, contributing greatly to a "surprise" decline of 1.2% in global exports. According to Reuters, the decline defied the forecast of 10 different economists, who were looking for an average rise of 3.3%. It should be the first of many downside surprises for economists and those who listen to them.

Indeed, since the start of 2019, there have been more downside surprises.

According to Reuters, exports in September plunged 11.7% from a year earlier, missing forecasts for an 11.2% decline and marking the 10th month of annual loss in a row.

Moreover, according to HIS Markit's survey of purchasing managers, South Korean manufacturing activity contracted for a fifth consecutive month in September from the previous month.

Asia's fourth largest economy is also experiencing consumer price deflation.

Read this excerpt from an Oct. 1 Reuters article:

South Korea recorded an annual fall in consumer prices for the first time in September while exports shrank for a 10th consecutive month, data showed on Oct. 1, reinforcing expectations of further policy easing from the central bank.

The consumer price index slid 0.4% in September from a year earlier, the Statistics Korea data showed, just missing a 0.3% fall tipped in a Reuters survey. It was the first time South Korea has recorded deflation on an annual basis since data releases began in 1965.

Now is the time to learn all you can about deflation so you can prepare for what EWI's analysts expect just down the road.

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