KOTRA "Next Year’s Exports Expected to Increase 7% to $550 Billion... Semiconductor Price Recovery"

Export Growth Expected to Resume After 3 Years... Strong Performance in New Growth and Non-Face-to-Face Items

[Asia Economy Reporter Kim Ji-hee] It is forecasted that South Korea's exports will exceed $540 billion (approximately 593.5 trillion KRW) next year, marking an increase for the first time in three years. The recovery in unit prices of key products such as semiconductors and crude oil, along with the expansion of online exports, is driving this growth.

KOTRA announced on the 21st that South Korea's exports next year are expected to increase by 6-7% compared to this year, reaching between $540 billion and $550 billion. This forecast is based on the opinions of buyers and resident trading companies collected from 127 overseas trade centers in 84 countries worldwide. This year, South Korea's exports are estimated to be around $510 billion, down about 6% from the previous year.

In addition to key products like semiconductors, which are expected to enter a supercycle, the strength of new growth and untact (contactless) related items is anticipated to lead the export recovery. Recently, Europe has accelerated eco-friendly policies such as plans to install one million electric and hydrogen vehicle charging stations and expand purchase subsidies. Furthermore, the untact economy, triggered by the COVID-19 pandemic this year, is expected to continue driving demand for IT products and home economy items.

However, KOTRA pointed out potential negative factors for exports next year, including the possibility of a COVID-19 resurgence, the spread of protectionism, and increased uncertainty in the global trade environment. KOTRA stated, "With the inauguration of the Biden administration in the U.S., changes in the nature of the U.S.-China trade dispute are expected, and uncertainties remain. The global trade order could rapidly change, potentially worsening the trade environment."

By country, exports are expected to expand to most regions except Japan and the Middle East. Large-scale economic stimulus packages in China, the U.S., India, and ASEAN, combined with economic recovery in major trading partners and eco-friendly policies in Europe and the U.S., are expected to broadly increase import demand. The OECD forecasts next year's import growth rates by country as 2.1% for China, 6.5% for the U.S., and 12% for India. Exports to Japan are expected to remain at this year's level due to prolonged economic recession and delayed consumption recovery.

Accordingly, KOTRA plans to actively pursue digital transformation of trade and investment and explore new markets to support export recovery. Specifically, it will promote ▲ revitalization of exports by small and medium-sized enterprises (SMEs) and mid-sized companies ▲ diversification of overseas market and product entries ▲ diversification of economic and trade cooperation based on win-win development ▲ enhancement of investment vitality linked to global job creation.

KOTRA will establish operational systems based on different scenarios according to the COVID-19 pandemic trends to respond effectively. First, it aims to increase the number of successful export cases among domestic and export beginner companies from 4,200 this year to 5,000 next year. Support for overseas marketing in new demand sectors in the post-COVID-19 era will also expand to 3,000 companies next year. To strengthen competitiveness in the materials, parts, and equipment industry amid the global value chain (GVC) restructuring, the number of Global Partnering (GP) Centers will increase to 10, and additional Smart City Cooperation Support Centers will be established.

Kwon Pyung-oh, President of KOTRA, said, "The year 2020 brought us both great crises and new opportunities. Based on the experience accumulated during the crisis, let's nurture the seeds of opportunity and open a new horizon for South Korea's exports next year."

This content was produced with the assistance of AI translation services.