South Korean Exports Predicted to Rise by 17.8% in January 2024


  • An uptick of 17.8% from the previous year was noted in exports from Asia’s fourth-largest economy, as predicted by the median forecast from 17 economists.
  • In January, South Korean exports made the biggest leap since May 2022, bouncing back from a year-long downturn.
  • Despite this, distortions can occur in South Korea’s January and February trade data due to differences in timing of the Lunar New Year holidays.
  • The export market remains optimistic, with semiconductors performing strongly, and a recovery led by solid shipments to the United States and China.
  • There are, however, potential hurdles such as weakening demand from Europe and stock interruption in the Red Sea.

Impressive Growth for Asia’s Fourth-Largest Economy

Exports from Asia’s fourth-largest economy in January are forecasted to have improved by 17.8% year-on-year, surpassing December’s 5.0%, according to the median estimate of 17 financial analysts participating in the survey that took place on January 23-29.

This is anticipated to be the highest annual upswing since May 2022 for South Korean exports, which began to increment gradually from October 2023 following a 12-month slump.

Lunar New Year’s Impact on Trade Data

South Korea is typically the first prominent economy to publish its trade figures each month, proving a preliminary indicator of global demand. Nevertheless, the nation’s data for January and February can be skewed by the differing dates of the Lunar New Year.

This year’s Lunar New Year, which took place in January the previous year, will occur in February, creating additional workdays and a favourable comparative base for this month.

A Bright Outlook for Korean Exports

“Korean exports are predicted to stay in the positive for the fourth consecutive month as exports of semiconductors continue to show strength,” commented economist Chun Kyu-yeon from Hana Securities. Chun also noted that strong exports to the United States and increasing shipments to China could lead a gradual recovery in exports.

For the initial 20 days of this month, semiconductor exports rose by 19.7%, continuing their upward trend for a third consecutive month.

A Closer Look at Export Destinations

Exports to the United States increased by 3.6% during this period, whereas those to the European Union fell by 9.4%. Shipments to China, on the other hand, rose slightly by 0.1% after 19 consecutive months of decline.

While calendar effects might provide a boost, analysts also recognize potential downturns such as weakening European demand and supply chain disruptions in the Red Sea area.

“Sequential momentum remains weak as Korea’s port activities dropped sharply due to logistics disruptions in the Red Sea region,” offered economists from Barclays in an accompanying note, particularly influencing non-tech exports which largely rely on sea transportation.

Predictions on Import Performance

Meanwhile, the survey predicts a 7.6% year-on-year decrease in imports for January, marking a lesser dip than December’s 10.8% and the smallest decline in 10 months, as per the survey.

According to the same survey, the median forecast points towards a surplus of $0.80 billion for the monthly trade balance. Although this is much smaller than that of December ($4.46 billion), it’s enough to keep the balance positive for an eighth consecutive month.

South Korea is slated to reveal the monthly trade figures for January on Thursday, Feb. 1, at 9 a.m. (0000 GMT).

Such financial news could impact forex or trading of South Korean won and other related assets due to the influence of exports and imports on the national economy.

PIP Penguin