Korean Think Tank: Chip Boom Offsets Manufacturing Weakness, South Korea’s Economy Remains on Recovery Track

Odaily Planet Daily News A South Korean official think tank stated on Wednesday that the country’s economy remains on a recovery trajectory, as the boom in the chip industry offsets the slowdown in overall 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. In June, South Korea’s monthly exports surpassed the $100 billion mark for the first time, reaching $102.25 billion, a year-on-year increase of 70.9%, setting a new historical high.

KDI stated, “Although the growth rate of semiconductor export volume has slowed, export value remains strong, supported by sustained price increases.” Driven by a surge in demand for memory chips, semiconductor export value nearly tripled, reaching $44.82 billion, marking the first time monthly exports have exceeded $40 billion. However, KDI pointed out that manufacturing output declined slightly, “as the rapid growth momentum in the semiconductor sector 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 weighing on the recovery of consumption.” (Jin Shi)