South Korea's Exports Surge Amid Chip Demand; Government Proposes Supplementary Budget
South Korean exports increased by 48.3% year-on-year in March, primarily due to a 151.4% rise in semiconductor exports. The government is proposing a supplementary budget of 26.2 trillion won to mitigate economic shocks related to the Middle East, which could affect growth in 2026.
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Exports from South Korea rose significantly by 48.3% in March, driven largely by semiconductor exports which increased by 151.4%. The government has proposed a supplementary budget of 26.2 trillion won to address shocks from the Middle East, projected to raise GDP by 0.2 percentage points.
Imports also rose by 13.2% year-on-year, while the trade surplus expanded to $25 billion. Despite these gains, GDP growth for 2026 has been revised down to 2.0%. Potential supply disruptions in semiconductors could impact manufacturing and increase inflationary pressures. The Bank of Korea may respond with interest rate hikes to stabilize inflation and financial stability.
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