Yonhap reported that South Korea's exports are expected to lose steam in the third quarter from three months earlier due to a slowdown in the global economic recovery and a firmer local currency.

According to the report by the research unit of the state run Export Import Bank of Korea, the country's outbound shipments are likely grow about 23% in the July to September 2010 period from a year earlier and down from a 34% surge in the second quarter.

The report said that "Exports are expected to expand at a slower pace as recoveries in major economies lose momentum and the recent strength of the South Korean won erodes their price competitiveness."

The IT sector that includes semiconductor makers will continue to lead outbound shipments down the road thanks to strong demand, but shipbuilders may suffer from declining overseas orders.

After declining for four quarters in a row, South Korean exports grew 12% YoY in the last quarter of 2009 and jumped 36% in the January to March 2010 period, as exports of electronics and vehicles led the export reliant economy's recovery from the global economic crisis.

The report also said the institute's index for the future export outlook fell to 117 for the third quarter from 123 in the previous three months, meaning exporters are less optimistic. The index was based on a survey of 455 exporting companies. Exports account for nearly a half of the economic growth of the country, which expanded 8.1% YoY in the first three months of 2010.

(Sourced from www.yonhapnews.co.kr)