Exports to bounce back in 2024 on rising demand for advanced chips: KITA
By Lee Min-hyung firstname.lastname@example.org
Korea will achieve a major turnaround in trade balance in 2024, powered by export recovery on growing demand for advanced chips and secondary batteries, Korea International Trade Association (KITA) Chairman Koo Ja-yeol said Wednesday during a press conference.
This year, the economy was battered by a set of volatile macroeconomic and geopolitical circumstances. According to an outlook by the association, exports are forecast to fall by 7.8 percent in 2023 from a year earlier, hit by negative chip industry circumstance and export decline to China, Korea’s largest trade partner. The association also expected Korea to suffer a trade deficit $15 billion (19.38 trillion won) this year.
But the worst is over and the economy will be on track for solid recovery next year, as key export items, such as semiconductors, components and materials for electric vehicles (EV), are widely forecast to acheive stable recovery, according to the head of the KITA, also known as Christopher Koo.
“The recovery momentum for major export items is widely expected to continue next year, which will help the nation to report a trade surplus,” Koo told reporters during the press conference.
Exports and trade balance are already showing signs of rebound. According to data from the Ministry of Trade, Industry and Energy, exports in October achieved a much-awaited turnaround for the first time in 13 months with growth of 5.1 percent from the previous year. The reviving exports also helped the economy to continue reporting a trade surplus for five consecutive months until October.
The trade association forecasted Korea’s exports to increase 7.9 percent in 2024. The organization also expected Korea’s trade surplus to reach $14 billion next year, buoyed by the less-pessimistic export outlook.
Koo also underscored the importance of the Korean economy reducing its reliance on the manufacturing sector, as the structure is vulnerable to external uncertainties.
“We are making efforts to strengthen competitiveness for other industrial sectors, such as biotech, entertainment, content and healthcare,” he said. But the head of the association also emphasized that Korea should tighten its footing as a semiconductor powerhouse by jumping into the ongoing major chip industry paradigm shift in an era of artificial intelligence.
Even if uncontrollable external risk factors, such as war, remain in place, Korea will be able to tackle the ongoing economic crisis, if companies and the government make joint efforts for investment and deregulation.
“The global economy is projected to expand a 2-percent range next year, and at this period of low growth, we should be willing to embrace challenges, and the government, for its part, also needs to find more measures for deregulation to spur investment from companies,” Koo said.
Regarding Korea’s failure to host World Expo 2030, Koo spoke highly of efforts made by companies and the government.
“While appealing to the global society for the nation’s southern port city of Busan to become a host city for the upcoming Expo, we have raised global awareness of our companies and the city, which enhanced the overall national brand power,” he said. “Such activities will also be of great help for Korean companies to win more orders and enhance their exports.”
The Korea Times Co.