Chip exports increase, South Korean economy regains growth momentum

South Korea's finance minister said the economy is entering a recovery phase thanks to signs of rising exports, but geopolitical tensions from the Middle East are emerging as a new uncertainty.

Con tàu kinh tế Hàn Quốc tăng tốc trong quý II/2022. (Nguồn: Yonhap)

Other key economic indicators, including inflation and employment, also showed a brighter outlook for the South Korean economy. (Source: Yonhap)

In a meeting with reporters on the sidelines of the annual meeting of the International Monetary Fund (IMF) and the World Bank (WB) in Marrakesh, Morocco, Finance Minister Choo Kyung Ho said that chip exports are gradually supporting the recovery of the country's export turnover.

Chip exports have hit their nadir and are gradually recovering, Mr Choo said, with the trend becoming clearer in the fourth quarter of 2023 and into 2024. The bottom line appears to be that the economy is starting to recover.

The comments came after South Korea's exports fell for a 12th straight month in September 2023 but recorded their lowest year-on-year decline as global demand for semiconductors is on the rise.

Finance Minister Choo added that other key economic indicators, including inflation and employment, also showed a brighter outlook for the South Korean economy.

According to Mr. Choo, major economies are experiencing inflation rates of around 5-6%, while Korea's inflation figures are hovering around 2-3%. Mr. Choo also stressed that the country's employment rate is also at a historic high.

The IMF previously lowered its growth forecast for South Korea in 2024 to 2.2 percent from its previous forecast of 2.4 percent as China's slowing economy and sluggish manufacturing sector slowed global economic growth.

However, Finance Minister Choo said that there are still many difficulties ahead because geopolitical instability in the Middle East could affect raw materials and oil prices globally. The Korean government is closely monitoring the situation and its impact on the economy and exports.

Mr. Choo also commented that if global oil prices remain at current levels, consumer price trends will not change significantly until the end of this year.

Source