South Korea’s export growth continued for the 11th consecutive month in August, but the pace of expansion slowed as demand for key products like semiconductors weakened and auto sales faced challenges. According to trade data released on Sunday, Asia’s fourth-largest economy saw its overseas sales rise by 11.4% year-on-year, reaching $57.90 billion. However, this growth was down from a 13.9% increase in July, which marked the fastest growth in six months. The August figure also fell short of the 13.0% increase predicted by economists.
One of the primary factors behind the slower growth was a decline in semiconductor exports, which hit a five-month low. The semiconductor sector, a major driver of South Korea’s economy, has been facing reduced global demand, impacting overall export performance. Additionally, the automotive sector experienced a decline in sales for the third consecutive month due to temporary factors such as wage negotiations and factory suspensions aimed at improving production lines.
By region, exports to China, South Korea’s largest trading partner, grew at a slower pace, reflecting broader economic challenges. In contrast, shipments to the United States saw accelerated growth, highlighting a shift in demand patterns. Notably, exports to the European Union rebounded strongly, ending a six-month streak of declines and surging by 16.1% to a record high of $6.4 billion. This resurgence in EU-bound shipments contributed to the overall export growth, which trade minister Ahn Duk-geun noted as a positive trend across major markets.
On the import side, South Korea saw a 6.0% increase in August, totaling $54.07 billion. This was slightly below the 6.3% gain anticipated by economists and marked a deceleration from the 10.5% rise in July, which had been the steepest since September 2022. Despite the slower import growth, South Korea recorded a trade surplus of $3.83 billion for the month, slightly wider than the $3.60 billion surplus posted in July.
Looking ahead, South Korea’s trade outlook remains cautiously optimistic, with expectations of a record-high export performance this year. However, challenges in key sectors like semiconductors and automobiles, as well as shifting global demand dynamics, will continue to shape the country’s trade trajectory in the coming months. The government and industry stakeholders are closely monitoring these trends to ensure sustained growth and economic stability.
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