Key Takeaways
- May exports reached USD 87.75 billion, marking a 53.2% increase year-on-year and setting a new record for the month.
- Semiconductor exports soared by 169.4% to USD 37.16 billion, significantly driving overall export growth.
- Both the Korea Institute for Industrial Economics & Trade and the Bank of Korea have raised their GDP growth forecasts for 2023 to 2.5% and 2.6%, respectively, due to strong export performance.
Record High Exports Driven by Semiconductors
In May, South Korea’s exports surged to USD 87.75 billion, up 53.2% from the previous year, marking an unprecedented third consecutive month over the USD 80 billion threshold. This growth, driven largely by semiconductors, prompted upward revisions of GDP growth forecasts by major economic institutions.
The Ministry of Trade, Industry and Energy reported that the strong export performance was built on a solid foundation of 12 months of consecutive growth. Minister of Trade Kim Jeonggwan emphasized the record trade surplus achieved from January to May and highlighted the effective management of increased imports despite rising oil prices.
Semiconductors were the standout contributor, with exports hitting an all-time high of USD 37.16 billion, reflecting an impressive 169.4% year-on-year growth. A ministry official noted that increased capital expenditure among U.S. tech giants pushed memory chip prices higher, facilitating sustained high export volumes. Notably, DRAM and NAND exports saw increases of 369.8% and 206.8%, respectively.
The unexpected strength in semiconductor exports has led both the Korea Institute for Industrial Economics & Trade and the Bank of Korea to elevate their respective GDP growth forecasts for 2023. The Korea Institute revised its outlook from 1.9% to 2.5%, while the Bank of Korea upped its estimate from 2.0% to 2.6%.
Several other export categories also experienced significant growth. Computer exports rose 290.7% to USD 4.18 billion, bolstered by demand for SSDs in AI servers. Furthermore, exports of wireless communication devices and display components showed positive growth.
The year-on-year performance also highlighted increases in commodity exports such as petroleum products and bio-health products, which have seen consistent demand in key markets. However, dynamics in the global market, influenced by the ongoing Middle East conflict, did lead to a decline in automobile exports, though other categories performed well despite these challenges.
Total imports climbed 20.8% to USD 60.8 billion, driven by both energy and non-energy products. The disparity between import and export growth resulted in a trade surplus of USD 26.95 billion for May, contributing to a cumulative surplus of USD 101.91 billion for the first five months of the year.
Despite these positive indicators, Minister Kim acknowledged ongoing uncertainties, including geopolitical tensions and tariff risks that might impact trade. He reaffirmed the government’s commitment to support the export sector and manage supply chain stability.
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