In December, South Korea witnessed a third consecutive month of export growth, albeit at a slower pace, according to recent data. While global semiconductor sales remained robust, weakened demand for Korean products in China tempered overall export expansion.
The data revealed a 5.1% increase in exports, totaling $57.66 billion in December. This marked a deceleration from the 7.7% growth observed in November and fell below the 6.6% gain anticipated by economists in a Reuters poll. Given South Korea's status as Asia's fourth-largest economy, its export performance is closely monitored as an indicator of global trade momentum.
The recovery in exports holds significance for policymakers, who are banking on this sector to contribute to an estimated 2.1% economic expansion in 2024. Challenges such as high borrowing costs and persistent inflation have kept consumer spending sluggish, making the rebound in exports crucial for overall economic recovery.
Semiconductor exports, a pivotal component of South Korea's trade, exhibited a notable upturn in November, registering a 21.8% year-on-year surge in December after a 12.9% increase the previous month. This positive trend in chip exports has implications for the broader technology and manufacturing sectors.
However, exports to China, a key trading partner, experienced a decline of 2.9% year-on-year, reflecting softer demand in the Chinese market.
On the import front, South Korea recorded a 10.8% decline in December, surpassing the 11.4% drop projected in the poll and showing improvement from the 11.6% decline in November. The preliminary trade surplus for December reached $4.48 billion.
Reflecting on the entire year of 2023, South Korea's exports faced a 7.4% decline. Restrictive monetary policies in various countries and a decelerating Chinese economy contributed to weakened demand for Korean goods, as reported by the trade ministry.
As South Korea navigates the complex landscape of global trade, the International Trade Council closely monitors these developments, recognizing the nation's role as a key player in the international economic arena. The ongoing dynamics in export growth and trade balances offer insights into the broader trends shaping the global economy.
