South Korea’s Export Growth Fuels Optimism Amidst Global Economic Recovery

SOUTH Korean exports continued to grow last month, adding to the optimistic outlook for economic growth and global commerce this year.

Shipments adjusted for working-day differences increased 12.5 per cent from a year earlier, according to data released on Friday (Mar 1) by the trade ministry. Unadjusted for the Lunar New Year holidays, which occurred in February this year, headline exports rose 4.8 per cent, while overall imports decreased by 13.1 per cent. The trade surplus expanded to US$4.29 billion.

South Korea serves as a key link in global trade as its companies are positioned widely across a variety of supply chains. Its exports rebounded from a year-long slump late last year, led by solid semiconductor demand. Display sales are on the rise, although automobile shipments slightly fell. The recovery raised hopes South Korea’s economic growth would accelerate this year.

The Bank of Korea last week maintained its forecast that gross domestic product will grow 2.1 per cent in 2024, pointing to the recovery in exports. If the trend continues into 2025, it would help the economy expand 2.3 per cent, according to the central bank.

Still, slowing consumption and slumping construction investment pose threats to South Korea’s economic momentum. The country is also on alert for the impact from persistent geopolitical tensions, including conflicts in the Middle East. A series of elections scheduled in a wide swathe of the world this year adds to policy uncertainties for global trade as well.

The global economy is projected to grow 3.1 per cent this year, below the historical average, as some central banks continue their inflation fight while fiscal support recedes and debt risks weigh on activity, according to the International Monetary Fund.