South Korea Likely to Enter $700 Billion Export Era in 2024

, Analysis of Recent Characteristics of Korean Exports and Presentation of Future Prospects and Challenges
Only 5 Countries Worldwide Achieved This as of 2019

[Asia Economy Reporter Kim Heung-soon] As South Korea's exports are expected to surpass $640 billion (approximately 763 trillion KRW) this year, marking the highest annual performance in history, projections indicate that if this trend continues, the country will enter the era of $700 billion (approximately 834 trillion KRW) in exports in 2024.

The Federation of Korean Industries (FKI) released a report on the 30th analyzing recent characteristics of Korean exports ahead of Trade Day on the 5th of next month, presenting forecasts for achieving $700 billion in exports and the tasks required to reach this goal.

This Year’s Exports Set to Achieve Record High Performance Driven by Corporate New Growth Engines and Export Expansion

According to the FKI, South Korea's total exports up to October this year increased by 26.0% compared to the same period last year, making it highly likely to achieve an all-time high annual export figure around $645 billion (approximately 769 trillion KRW). Based on this, if South Korea’s exports continue the recent five-year (2017?2021) average annual growth rate of 2.97% over the next 3 to 4 years, the country is expected to enter the $700 billion annual export era as early as 2024, the FKI added. The $700 billion annual export milestone was only achieved by five countries?China, the United States, Germany, the Netherlands, and Japan?based on 2019 figures before the COVID-19 economic crisis.

South Korea recorded an average annual export of $549.1 billion (approximately 655 trillion KRW) over the past decade (2011?2020) and achieved double-digit growth this year. The FKI forecasts that this growth trend will continue, attributing it to Korean companies’ bold pre-investments in new growth engines such as secondary batteries, bio-health, organic light-emitting diodes (OLED), and electric vehicles, effects of which began to emerge amid the COVID-19 pandemic.

Externally, global trade has fully recovered from the COVID-19 pandemic this year, with mid-3% growth expected through 2025. The International Monetary Fund (IMF) projected in its October World Economic Outlook that global merchandise exports will increase by 23.3% in price terms compared to 2020 this year and will grow by 7.6% next year.

Additionally, Standard Chartered Group forecasted in its report "The Future of Trade 2030: Trends and Markets to Watch" on the 25th that South Korea’s exports will grow at an average annual rate of 7.1% over the next decade, approaching $1 trillion (approximately 1,192 trillion KRW) by 2030.

Decline in Export-Induced Employment Effect Poses a Challenge

The FKI noted that while exports of high value-added items such as system semiconductors, bio-health, solid-state drives (SSD), and OLED have increased, the employment inducement effect?which indicates the contribution of exports to job creation?has been declining since 2016 due to intensified global division of labor and productivity improvements from technological innovation. This decline is attributed to the fact that the share of semiconductor exports, which have relatively low job creation effects, is approaching 20%.

Kim Bong-man, Director of International Cooperation at the FKI, stated, "The qualitative advancement of our export structure is progressing, with increased exports of high value-added products that have lower employment inducement effects. Employment support measures suitable for this change need to be strengthened." He added, "To achieve the early realization of the $700 billion export era, trade policies should focus on identifying and implementing tailored tasks centered on countries and regions with large export shares."

Meanwhile, Trade Day was originally designated in 1964 to commemorate reaching $100 million in exports and was changed to December 5th in 2011 to mark South Korea becoming the ninth country in the world to achieve a trade volume of $1 trillion.

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