South Korea’s Exports Rise 6.6% in December Boosting Economic Expansion

Summary

  • December exports are projected to have grown 6.6% year-over-year, according to a median estimate by ten economists.
  • The fourth-largest economy in Asia, South Korea, is closely monitoring export data to ascertain momentum in worldwide trade.
  • Economist Jiuk Choi of Citigroup indicates that semiconductor and ship exports could generate the largest trade surplus since January 2021.
  • In November, for the first time in over a year, chips exports saw an uptick, signifying a strengthening global demand.
  • The first 20 days of the current month saw a 13.0% export surge from the previous year, largely driven by AI-related chips, smartphones, and other technology.
  • The consumer inflation is projected to slightly drop to 3.26% from November’s 3.3%.

Trade Outlook on South Korea

Median estimates from ten economists anticipate a 6.6% year-over-year rise in December exports. This outcome, though slower than November’s 7.7% growth, represents the third consecutive month of expansion.

Global Trade Perspective

Policymakers have expressed optimism that improved export figures will bolster South Korea’s economy and achieve a 2.1% expansion in 2024. Export data has been identified as a significant indicator for monitoring global trade momentum.

Driving Factors

Notable contributions to trade are expected from stronger semiconductor and ship exports, as forecast by Citigroup economist Jiuk Choi. These sectors are predicted to deliver the largest trade surplus since January 2021.

Trends and Updates

In November, the export of chips increased for the first time in over a year. Early signs of rebounding demand for AI-related chips, smartphones, and other technologies was evident as exports leaped 13.0% in the first 20 days of the current month.

Balance of Trade

A predicted drop of 11.4% in imports from the previous year is expected to widen the trade surplus to $6.26 billion in December. South Korea will disclose its monthly trade data for November at 9 a.m. (0000 GMT) on Monday, Jan. 1.

Consumer Inflation

The same data stated consumer inflation may slightly ease to 3.26% from 3.3% in November.

Last but not least, these trends in the export sector and the anticipated boost in South Korea’s economy could significantly sway forex or trading patterns, affecting assets linked with global trade and economic growth. Accent should be put particularly on semiconductor, technology and shipbuilding industries.

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