South Koreas export growth offsets the impact of sluggish domestic demand

According to the latest March Economic Trends report released by the Korea Development Institute (KDI), the recession risk faced by the South Korean economy is being alleviated due to the recovery of exports, although the growth rate of domestic demand consumption is still slowing down. Under the continuous impact of the high - interest - rate environment, consumption and equipment investment are expected to continue to shrink, but the export growth driven by the strong demand in the semiconductor market offers a glimmer of hope for the economy.

The report points out that, after seasonal adjustment, the retail sales index increased by 0.6% and 0.8% in December last year and January this year respectively. However, due to the year - on - year decline for seven consecutive months, the overall situation of the consumer market remains pessimistic. KDI analysis believes that the misalignment of the Spring Festival months in this year and last year has had a significant impact on the data in January and February, especially the consumption of products sensitive to interest rate changes such as passenger cars showing a month - on - month decline (-16.2%).

Service consumption is mainly offline consumption, showing a weak stabilizing trend. At the same time, equipment investment increased by 4.1% in the same period last year, but decreased by 5.8% month - on - month, which reflects the pulling effect of temporary factors such as the low - base effect and the increase in working days on investment.

It is worth noting that investment in semiconductor equipment shows signs of recovery. Benefiting from the continuous growth of the global semiconductor market demand, the index of special - purpose machinery closely related to semiconductor investment has increased significantly year - on - year, demonstrating the vitality and prospects of the industry.

In terms of exports, the report shows that with the gradual recovery of global trade and strong semiconductor demand, South Koreas exports have gradually improved. The average daily export value increased by 12.5% year - on - year, and the growth rate expanded compared with last month (5.7%). This trend indicates that although the domestic economy faces many challenges, the export growth of key industries such as semiconductors remains a key driving force for South Koreas economic growth.

Overall, although domestic demand in South Korea is sluggish, the recovery of exports provides some support for the economic outlook. The South Korean government and enterprises need to closely monitor global economic trends, take effective measures to promote the recovery of domestic demand, and seize opportunities in the export market to achieve stable economic growth. The future development of the South Korean economy will largely depend on changes in the global economic environment and the adaptability of internal policies.