South Korea’s November exports grew 13.3% year-over-year, driven by strong demand for semiconductors and automobiles amid global trade tensions. This performance resulted in a $9.7 billion trade surplus, signaling resilience in the face of protectionist policies.
Semiconductor exports surged nearly 39%, fueled by AI and data center needs.
Automobile shipments rebounded with a 14% increase, offsetting declines in petrochemicals.
Overall trade surplus reached $9.7 billion, with imports up 1.2%.
South Korea November exports hit 13.3% growth, boosted by semiconductors and autos. Discover how this impacts global trade and policy amid tariffs. Stay informed on economic resilience.
What drove South Korea’s export growth in November?
South Korea November exports accelerated to 13.3% year-over-year, adjusted for working days, primarily propelled by robust semiconductor and automobile sectors. This marked an improvement from October’s 14% gain, providing a buffer against rising global protectionism. The data, released by the customs office, underscores the economy’s adaptability in key industries.
How did semiconductors contribute to South Korea’s economic performance?
Semiconductor exports in South Korea jumped almost 39% in November, largely due to heightened global demand for AI technologies and data center infrastructure. This surge has been a cornerstone of the country’s export-led growth, with industry analysts highlighting the role of high-value chips like DRAM. According to customs data, this performance helped mitigate broader trade challenges, though experts warn that excluding semiconductors reveals slower growth in other areas. Lim Hye Youn, an economist at Hanwha Investment & Securities Co., noted that while overall exports appear strong, the reliance on chips is evident, and diversification efforts have reduced dependence on the US market despite tariffs.
Frequently Asked Questions
What was the impact of the South Korea-US trade deal on exports?
The landmark deal limits US tariffs on Korean imports to 15%, covering vehicles and other key goods previously facing 25% levies. This agreement, finalized last month, is expected to boost shipments starting November 1, enhancing market confidence and supporting equipment investments, as per Bank of Korea Governor Rhee Chang-yong.
Will South Korea’s economy continue growing in 2025 and 2026?
South Korea’s economy is projected to expand by at least 1% in 2025 and over 2% in 2026, driven by steady exports and semiconductor demand. The Bank of Korea has upgraded its forecasts to 1% for 2025 and 1.8% for 2026, reflecting strong third-quarter output and private consumption recovery, according to official statements.
Key Takeaways
- Export Resilience: South Korea November exports grew 13.3% despite global tariffs, thanks to semiconductors and autos.
- Trade Surplus Boost: A $9.7 billion surplus emerged from 8.4% headline export gains and modest import rises.
- Policy Stability: Bank of Korea holds rates at 2.5%, with divided views on future cuts amid optimistic growth outlooks.
Conclusion
South Korea’s November exports demonstrated impressive strength at 13.3% growth, anchored by semiconductors and automobiles, while the recent US trade deal offers further stability against protectionism. As the Bank of Korea refines its projections for 2025 and 2026, the economy appears poised for continued expansion. Investors and policymakers should monitor diversification efforts to sustain this momentum in an evolving global landscape.
South Korea’s November exports remained strong, boosted by high demand for automobiles and semiconductors. This situation has provided reassurance to policymakers as they confront the rise of global protectionism.
Following November’s economic reports, data from the customs office published on Monday, December 1, highlighted that shipments adjusted for differences in working days surged 13.3% that month compared to the same period in the previous year. This rise took place following a 14% gain in the previous month.
Headline exports, on the other hand, surged 8.4% after a revised 3.5% rise in October. Imports also increased by 1.2%, resulting in a trade surplus of $9.7 billion.
South Korea’s economic growth surges amid a significant rise in exports
Sources noted that semiconductor exports in South Korea continued to drive the country’s growth, increasing by almost 39%. This growth has mainly resulted from a strong demand for AI and data centers.
Apart from semiconductor exports, the car industry has also rebounded with a nearly 14% surge, more than offsetting the slowdown in sectors such as petrochemicals.
Lim Hye Youn, an economist at Hanwha Investment & Securities Co, commented on this growth. The economist argued that exports seemed solid because both DRAM and high-value semiconductors were performing well. Therefore, he cautioned that if the country decided to exclude semiconductors, then the overall export situation would not be this good.
“Nonetheless, exports are performing better than anticipated despite American tariffs because companies have lessened their dependence on the US and expanded into other markets,” Lim added.
This positive trade report was released just a few days after the Bank of Korea(BOK) made public its decision to keep its benchmark rate steady at 2.5%. At this time, the central bank had also implemented some changes to its statement, indicating that it is less likely to cut rates further than it has in the past.
Still, officials demonstrate a divided stance on a decision regarding rate cuts. This situation was noted after the Governor of the Bank of Korea, Rhee Chang-yong, acknowledged that the board is evenly split on the outlook. According to information from the governor, three members supported a further reduction of interest rates, while three others anticipated that the interest rates would remain unchanged for now.
In the meantime, it is worth noting that the central bank implemented slight improvements to its growth and inflation predictions through 2026. Sources close to the situation noted that, along with the rate decision, the BOK increased its 2026 growth outlook to 1.8% from the 1.6% estimated in August. It also raised its 2025 prediction to 1%, illustrating strong third-quarter output primarily driven by significant chip exports and a consistent rebound in private consumption.
South Korea-US trade deal sparks hope in the market
As South Korea released its outstanding economic reports, it was confirmed that the country and America had completed a landmark deal last month to limit US President Donald Trump’s tariffs on imports of Korean goods to 15%. The agreement covered key goods, such as vehicles, which were initially subjected to a 25% levy.
This move aligns with Seoul’s earlier prediction that the auto rate will be retroactively reduced starting November 1. Meanwhile, the country’s ruling party submitted a special bill proposal to carry out its $350 billion investment promise last week.
Considering the situation, Rhee shared his forecast that outbound shipments and companies’ equipment investment will surpass expectations. He noted that this will happen, backed by the global increase in semiconductor production and the recent breakthrough in the trade agreement with Washington.
Several economists also weighed in on the matter. An example is Hyosung Kwon, a Korean economist. He mentioned that, “Since exports are steady, we believe the economy is set to grow by at least 1% in 2025 and more than 2% in 2026. Given this situation, the Bank of Korea doesn’t need to make any further changes to its policies.”
By destination, shipments to the US dropped by 0.2% as some sectors, such as auto parts and steel, struggled due to tariffs imposed on them. As for China, exports soared 6.9%. Shipments to the Middle East also increased by around 33% and those to Southeast Asia rose by 6.3%.