South Korea's Exports Surge Driven by Semiconductor Sales

South Korea's exports are projected to have increased for the ninth consecutive month in June, driven by strong semiconductor sales to the US. The growth rate is expected to have slowed to 6.3% from a year earlier, attributed to calendar effects. Despite being lower than May's increase, this growth is mainly due to fewer working days in June compared to the same period last year.

As Asia's fourth-largest economy, South Korea plays a crucial role as an early indicator of global demand trends. The sustained growth in exports is primarily fueled by robust semiconductor exports, with the US accounting for about 20% of total shipments. In the first 20 days of June, exports rose by 8.5%, led by a significant 50.2% surge in semiconductor shipments. Exports to the US increased by 23.5%, while those to China climbed 5.6%.

The finance minister is optimistic about exports recovering to record-high levels in the first half of the year. However, in the second half, growth rates may weaken due to high comparison bases, even though exports are expected to be supported by economic rebounds in regions beyond the US. The poll also projects a 2.2% decline in imports for June, following a 2.0% decrease in May.

South Korea's trade balance is forecasted to maintain a surplus for the 13th consecutive month, with an estimated surplus of US$5.24 billion in June, widening from US$4.86 billion in May. The country is set to release its trade figures for June on July 1 at 9 am.

South Korea's export performance in June reflects the country's resilience in the global market, driven by strong semiconductor sales. While the growth rate may have slowed, the consistent surplus in trade balance indicates stability in the economy. As South Korea continues to be a key player in global trade, the upcoming release of trade figures will provide further insights into the country's economic trajectory.