Annual Exports Expected to Total US$690bn
The Korea International Trade Association (KITA) announced on Dec. 4 that South Korea’s exports are expected to reach an all-time high of US$690 billion this year. The previous high is US$644.4 billion, which was recorded last year. The monthly exports have topped US$50 billion for 20 months in a row since March last year.
From January to September this year, South Korea was the world’s sixth-largest exporter behind China, the United States, Germany, the Netherlands and Japan, whereas it came in seventh last year. The gap with Japan was US$33.9 billion, the smallest ever, at the end of September.
South Korea’s exports are showing quantitative growth despite supply chain risks, U.S.-China disputes and the ongoing war in Ukraine. Last year, South Korea’s export unit price index increased 17 percent and export volume index increased 8 percent. From January to September this year, the indices rose 8.5 percent and 4.3 percent, respectively. The export volume growth was led by the semiconductor and automotive industries and the unit price growth was led by petroleum and steel products.
Still, South Korea’s trade surplus fell below zero in 14 years. This year’s trade deficit is estimated at US$45 billion. According to the association, this is because energy imports surged with regard to the war in Ukraine and industrial energy demand has recovered this year. “The trade deficit is nothing to worry about in that major manufacturers and exporters, including Germany and Japan, are currently showing the same trend,” it said, adding, “Most of the deficit is related to oil-producing countries in the Middle East and South Korea’s trade deficits with the United States and the European Union are decreasing.”
Its exports are showing qualitative improvements at the same time. Exports from its eight new growth industries are showing a double-digit growth for the third consecutive year. The eight are advanced semiconductor, biotech and healthcare, advanced display, new energy, electric vehicle, advanced materials, aerospace, and robot.
From January to October, the eight sectors showed an export growth of 11.5 percent while the overall export growth was 10.3 percent. The eight sectors’ ratio to South Korea’s total exports hit an all-time high of 19 percent. Electric vehicle exports increased 41.8 percent, followed by aerospace (40.7 percent) and advanced semiconductor and advanced display (12.1 percent each).
From January to September, South Korea’s service exports increased 15.2 percent year on year to US$100.1 billion while goods exports increased 12.1 percent. Especially, it is expected to record its first annual intellectual property trade surplus this year. The surplus was US$400 billion in the second half of last year and US$3.7 trillion in the first half of this year.