Driven by a global surge in artificial intelligence investment, which has propelled chip sales to a record, South Korea's export growth in May reached its highest level in over 40 years, surpassing market expectations.
Preliminary trade data released on Monday showed that exports, a key barometer for global trade from Asia's fourth-largest economy, soared 53.2% year-on-year in May to a historic high of $87.75 billion. This exceeded the median forecast of a 48.4% increase from a Reuters survey.
This marks the 12th consecutive month of year-on-year export growth for South Korea and represents the largest annual increase since January 1984.
The Ministry of Trade, Industry and Energy attributed the surge to sustained investment by U.S. technology firms and rising memory chip prices, which drove semiconductor exports up by 169.4% year-on-year in May. Chip exports reached a monthly record of $37.16 billion.
Boosted by demand for AI servers, computer exports skyrocketed by 290.7%. Petroleum product exports increased by 46.6%, influenced by high oil prices. However, automobile exports declined by 5.9%, affected by Middle East supply chain disruptions and U.S. tariffs.
By destination, exports to the United States grew by 59.1%, while exports to the Middle East fell by 7.7%.
Last week, the Bank of Korea raised its economic growth forecast for this year to 2.6% from 2.0%. This revision follows the trade-dependent economy's strongest quarterly growth in nearly six years in the previous quarter, fueled by the explosive rise in chip exports.
In May, South Korea's imports increased by 20.8% year-on-year to $60.80 billion, slightly below the median economist forecast of 21.5% but still the highest level since August 2022.
The country's trade surplus for May reached $26.95 billion, setting a new record high and exceeding the previous month's figure of $23.75 billion.
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