South Korean Think Tank: Chip Boom Offsets Manufacturing Weakness, Economy Still on Recovery Track

Odaily reported that a South Korean official think tank stated on Wednesday that the country's economy remains on a recovery track, with the boom in the chip industry offsetting the overall slowdown in manufacturing. In its monthly economic assessment report, the Korea Development Institute (KDI) noted that South Korea's exports continue to expand "strongly," driven by robust demand related to artificial intelligence. South Korea's monthly exports surpassed the $100 billion mark for the first time in June, reaching $102.25 billion, a year-on-year increase of 70.9%, setting another record high.

KDI stated: "Although the growth rate of semiconductor export volume has slowed, export values remain strong, supported by continuous price increases." Driven by a surge in demand for memory chips, semiconductor exports nearly tripled to $44.82 billion, marking the first time monthly exports have exceeded $40 billion. However, KDI pointed out that manufacturing output has slightly declined, as "the rapid growth momentum of semiconductors in the early stages has slowed, while other sectors remain sluggish." KDI added that high oil prices and the weakening of the South Korean won against the US dollar could "continue to exert upward pressure on prices, increasing the risk of further interest rate hikes, thereby dragging down the recovery of consumption." (Jin Shi)