Exports Led the Korean Economy... Created 4.05 Million Jobs Last Year Despite the Pandemic

Institute of Martial Arts Trade and Commerce Research Announces 'Analysis of the Contribution Effect of Exports on the National Economy'

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[Asia Economy Reporter Moon Chaeseok] An analysis revealed that 4.05 million new jobs were created thanks to South Korea's exports, which achieved record-high performance last year by overcoming the COVID-19 pandemic.

The Korea International Trade Association's International Trade and Commerce Research Institute released the 'Analysis of the Contribution Effect of Exports on the National Economy' report on the 13th. According to the data, the contribution of exports to economic growth last year was 2.1 percentage points (p), accounting for more than half of the 4.1% economic growth rate. The export share in real Gross Domestic Product (GDP) was also 37.9%, the highest in the past five years.

The number of jobs directly and indirectly induced by exports last year was 4.05 million, a 17.8% increase from 3.44 million in 2020. This accounted for 14.9% of the total 27.27 million employed persons, an increase of 2.1 percentage points compared to 2020. By product category, the automotive sector induced the highest employment with 620,000 jobs, followed by semiconductors (310,000) and special-purpose machinery (300,000). The number of jobs induced per $1 million (approximately 1.3 billion KRW) of exports was 6.3. Special-purpose machinery (8.9), automobiles (8.8), and precision instruments (7.8) ranked highest in this regard.

The value-added induced by exports amounted to $402.2 billion (approximately 527 trillion KRW), accounting for 62.4% of last year's total export value of $644.4 billion (approximately 845 trillion KRW). The value-added inducement rate means that for every unit increase in exports, 0.624 units of value-added are created domestically, while 0.376 units of imports are induced. The value-added inducement rate decreased by 0.9 percentage points from 63.3% in 2020 due to increased import inducement in petroleum products and synthetic resins. By product, the value-added induced was led by semiconductors ($85.7 billion / approx. 112 trillion KRW), automobiles ($49.1 billion / 64 trillion KRW), and special-purpose machinery ($23.5 billion / 31 trillion KRW). The value-added inducement rates for automobiles (70.4%), special-purpose machinery (69.3%), and semiconductors (67.1%) exceeded the average of 62.4%.

Jo Euyoon, senior researcher at KITA, stated, "Exports were the driving force behind South Korea's economic growth and job creation amid the pandemic crisis, and exports will also be the key to overcoming domestic demand sluggishness this year." He emphasized, "We need to further enhance the contribution of exports to the national economy by improving the value-added of export products, fostering export industries with high job creation effects, and managing supply chains of products with high import inducement rates."

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