South Korea’s exports are forecasted to reach a record high of $690 billion this year, a 9.1% increase from last year. Notably, the export surge is led by semiconductors, information technology (IT) devices, automobiles, and ships.
The Korea International Trade Association’s Institute for International Trade released a report on the 24th containing these projections, titled Bi-Annual Export and Import Evaluation and Second Half Outlook of 2024. The report predicts that South Korea’s imports will increase by 1.0% from last year to $649 billion, with a trade surplus of $41 billion.
The export forecast increased by 1.6% from the 7.5% predicted by the association at the end of last year. If achieved, this will be the highest export performance in history. The combined trade volume of exports and imports is the second largest following 2022.
The report identifies the biggest drivers of this year’s export growth as the strong performances of semiconductors, automobiles, and ships. The Korea Trade Association predicts that semiconductor exports will increase by 31.8% from last year, due to the rapid growth of the artificial intelligence (AI) industry and increased demand for IT products in China. Exports of computers (53.0%), displays (10.3%), and wireless communication devices (8.0%) are also expected to have a positive impact due to the rapid recovery of the global IT market.
Despite concerns about the electric vehicle (EV) chasm (temporary demand slowdown before mass adoption), exports of automobiles with strong performance last year are expected to grow by 3.7% overall, led by hybrid electric vehicles (HEVs) and sport utility vehicles (SUVs).
In the second half of the year, ship exports are expected to increase by 14.3%, anticipated by the delivery of high-value ships such as liquefied natural gas (LNG) carriers and large container ships to Europe and Asia.
The report analyzes that most of Korea’s 13 major export items will increase as the recovery of the global economy, easing of high interest rates, and weakening inflation will gradually expand consumption. However, steel exports are expected to decrease by 0.8% compared to last year due to a decline in export prices and weak demand in the first half of the year.
Cho Sang Hyun, Director of the Korea International Trade Association’s Institute for International Trade, said, “Until May, South Korea’s exports increased the fastest among major countries, leading economic growth. If we maintain the trend of the first half, we can expect the highest export performance this year as well as the record highs for our two major export items, semiconductors and automobiles.” According to the Korea Trade Association, the export growth rate of major countries from January to May of this year was 9.1 for Korea, 8.7 for Taiwan, and 0.1 for China.
Cho emphasized, “International oil price and exchange rate instability due to geopolitical risks in the Middle East, trade disputes between the U.S. and China, strengthening of tariff barriers in major countries, and rising ocean freight rates are variables for the second half of the year. We will closely communicate with the trade industry and the government to maintain the export recovery trend.”
