SEOUL: South Korea’s exports likely fell in March at the steepest pace in nearly three years, a Reuters survey showed on Thursday, in a continued downtrend driven by weak demand from China and for semiconductors.

Outbound shipments were expected to have fallen 17.5% in March from a year earlier, after a 7.5% decline in February, according to the median estimate of 18 economists in the survey conducted during March 23-29.

It would be the fastest decline since May 2020 and the sixth consecutive month for exports to log a year-on-year drop. Economists said demand from China - South Korea’s biggest trading partner - was seen continuing to weaken with little boost from the shift in its COVID-19 policy late last year.

“There has yet to appear any benefit from China’s reopening, with barely an increase seen in its retail sales so far this year,” said economist An Ki-tae at NH Investment and Securities. In the first 20 days of this month, South Korea exported goods worth 17.4% less than a year earlier. Shipments to China dropped 36.2%; semiconductor exports slumped 44.7%.

The country’s imports likely fell 6.6% in March from a year earlier, after a 3.5% rise in February, according to the survey. It would also be the biggest loss since August 2020.

All together, South Korea is expected to post a 13th consecutive monthly trade deficit. The median expectation of economists in the survey was a deficit of $6.08 billion, a little wider than $5.27 billion a month before.

Full monthly trade data is scheduled for release on Saturday, April 1, at 9 am (0000 GMT). The survey also found a median expectation that annual consumer inflation for March, due on April 4, would slow to 4.3% from 4.8% in February and mark the lowest in 12 months.

On factory output, economists estimated seasonally adjusted production to have fallen 0.5% in February, after a 2.9% rise in January, which was the first on-month gain in seven and the biggest in 13 months. That data will be reported on March 31.