"This Year’s Export Expected to Reach an All-Time High"…Which Industries Will Benefit?

[Asia Economy Reporter Ji Yeon-jin] As South Korea's exports are expected to record an all-time high this year, attention is focusing on the stock price trends of export companies.

According to the financial investment industry on the 3rd, South Korea's exports in the second half of the year are expected to increase by 14% compared to the previous year. Last month's exports increased by 39.7% year-on-year, far exceeding market expectations. June exports +39.7% YoY: June exports increased by 39.7% compared to the same month last year, and the daily average increased by 36.8%. The export growth rate for the second quarter was 42.0%, and for the first half of the year, 26.1%. Although this surge is due to the base effect, even in absolute terms, the export amount in the first half of the year surpassed the previous record high of 2018, marking an all-time high performance.

The industry expects export amounts in the third and fourth quarters to be similar to those in the second quarter. The economies of major trading partner countries are at their peak, and the momentum from the shift in consumption patterns in advanced countries from products to services is believed to have reached its peak. Additionally, due to the global spread of vaccine distribution leading to the normalization of economic activities and trade, as well as inventory accumulation and investment demand in various countries, exports are expected to remain robust in the second half of the year.

Park Sung-woo, a researcher at DB Financial Investment, said, "The export growth rate in the second half of the year is expected to increase by 14% compared to the same period last year, and the annual growth rate is expected to approach 20%. The annual export amount will also surpass the record high level of 2018."

The COVID-19 Delta variant is cited as the biggest risk, as it could hamper export companies. The spread of the Delta variant could weaken the global economic rebound and exacerbate manufacturing supply chain bottlenecks, causing damage to global trade from both demand and supply perspectives.

Risks such as disruptions in the supply of automotive semiconductors, the continuation of rising maritime transportation costs, and the possibility of worsening US-China trade relations are also expected to remain. Researcher Park said, "In the second half of the year, import growth is expected to exceed export growth due to a surge in import demand driven by domestic demand recovery. This could act as a factor suppressing the won's appreciation in the foreign exchange market despite the domestic economic recovery and the Bank of Korea's base rate hikes in the second half of the year."

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