Sooeun "Q1 Exports Expected to Increase by 2-3% Year-on-Year"

by Lee Changhwan

Published 05 Feb.2025 11:36(KST)

Export Slowdown Expected to Continue

Export containers are piled up at Busan Port. Photo by Jinhyung Kang aymsdream@

The Korea Eximbank (KEXIM) Overseas Economic Research Institute forecasted on the 5th that exports in the first quarter of this year will increase by 2-3% compared to the same period last year, reaching approximately $167 billion to $168 billion.

The institute noted that the export leading index, which turned downward in the fourth quarter of last year, continues to decline into the first quarter of 2025, indicating that the export slowdown is expected to persist for the time being. The export leading index for the first quarter stood at 119.3, down 3.1 points year-on-year and 1.5 points quarter-on-quarter.

Although the U.S. economy remains robust, uncertainties are growing ahead of changes in trade policies under the new government, and the economic recovery of major trading partners such as China is also being constrained.

Semiconductor exports are expected to maintain an upward trend in the first quarter; however, concerns remain over increasing uncertainties due to changes in U.S. trade policies and a contraction in the export leading index, making the external environment uncertain.

Looking ahead, the KRW/USD exchange rate is expected to remain weak for the time being due to delayed U.S. interest rate cuts, increased domestic political uncertainties, and continued net selling of stocks by foreign investors. Regarding international oil prices, concerns over supply disruptions due to strengthened U.S. sanctions on Russia and declining U.S. crude oil inventories are expected to cause oil prices to fluctuate slightly higher in the $80 range compared to the previous quarter.

A KEXIM official stated, "While semiconductor exports are expected to maintain growth, uncertainties are increasing due to changes in U.S. trade policies, which will likely reduce the growth rate of exports. However, if the impact of U.S. policies further delays China's economic recovery and the global economy contracts faster than expected, the export growth rate could be further reduced."