South Korea’s exports extend 10-month growth streak in July, rise 13.9 percent to $57.4 billion

South Korea’s exports extended annual gains for the tenth straight month in July on greater semiconductor sales and shipments. The Ministry of Trade, Industry and Energy revealed on Thursday that South Korea’s outbound shipments rose 13.9 percent year-on-year to $57.4 billion last month after a 5.1 percent rise in June, marking the fastest growth since January.

14th consecutive trade surplus

The country’s imports rose 10.5 percent year-on-year to $53.8 billion, resulting in a trade surplus of $3.62 billion. Asia’s fourth-largest economy has so far maintained a trade surplus for 14 consecutive months. The combined trade surplus during the first half of 2024 reached $26.7 billion, the highest since 2018.

Semiconductor exports surge

South Korea’s exports of semiconductors grew for the ninth consecutive month, rising 50.4 percent in July, in addition to gains across other IT products. Computer sales jumped 61.6 percent and the shipments of wireless communications devices rose 53.6 percent. However, automobile exports declined 9.1 percent due to earlier summer vacation periods at major auto firms.

China shipments hit 21-month high

By destination, South Korea’s exports to the U.S. rose for the 12th straight month, up 9.3 percent, while China shipments rose 14.9 percent to a 21-month high of $11.4 billion. Demand from China came largely from customers seeking semiconductors, smartphone parts, and electronic screens, the ministry stated.

Read: EU agri-food trade surplus reaches $5.43 billion in April 2024, driven by higher prices and increased exports

South Korea’s monetary policy

The impact of high interest rates has taken a toll on South Korean businesses while falling investments were a key factor weighing on South Korea’s economic growth in the second quarter of this year, posing concerns for policymakers. Many economists now see the central bank easing policy in October. A possible interest rate cut by the U.S. Federal Reserve in September should help pave the way for South Korea to follow suit.

The central bank has held its benchmark interest rate at 3.5 percent since early 2023, with growth in exports giving authorities confidence the economy can withstand tight policy.

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