Exports continue to grow in March against flagging consumption

Containers for exports and imports are piled at a pier in the southeastern port city of Busan on Jan. 1, 2024. [Yonhap]

Korea’s exports in March grew rapidly on the back of a strong rebound in the semiconductor sector, though private consumption and investment remained weak, a state-run think tank said Sunday.

“The Korean economy is experiencing a moderate downturn, buoyed by rapid growth in exports, particularly from the IT sector,” the Korea Development Institute (KDI) said in a monthly economic assessment report.

“But consumption remains weak, particularly in goods consumption, as financing conditions are not improving due to persistently high interest rates. Though equipment investment exhibited some positive signs, construction investment is now experiencing a slight moderation,” the report read.

The latest assessment about exports was more positive than last month's, but the institute pointed to weak domestic demand for five months in a row.

In March, exports, a key economic growth engine, rose 3.1 percent on year with strong chip sales, marking the sixth consecutive monthly increase.

Industrial output rose for the fourth consecutive month by going up 1.3 percent on month in February thanks to increasing semiconductor production.

On-year trends saw mining and manufacturing production rise 4.8 percent in February, while the output of semiconductors soared 65.3 percent from the previous year.

However, construction orders received and area where building is permitted, two leading indicators of industry conditions, continued to slide by a large margin, indicating “a potential continuation of the slowdown in construction investment going forward,” the KDI noted.

“External risk factors persist, such as rising international oil prices and transportation disruptions precipitated by geopolitical tensions,” the report showed.

Yonhap