The Zhitong Finance App learned that South Korea's exports continued to grow steadily in early September, driven by semiconductor shipments supported by global demand for artificial intelligence and this economy that relies on trade in a broader sense. According to data released by Korea Customs on Monday, exports increased 89.8% year-on-year in the first 20 days of September, compared to a 61.5% increase in the first 20 days of September, as initially reported in the same period in August. Unadjusted exports grew 78.3%, and imports rose 26.7%, resulting in a trade surplus of nearly $23 billion.
Semiconductors are still the main driver of this round of growth, and chip exports increased 259.4% year over year. Shipments of petroleum products increased by 47.8%, and automobile exports increased by 9.3%. By destination, exports to China increased by 113.8%, while exports to the US increased by 118%. Exports to Vietnam and the EU increased by 44.8% and 37%, respectively.
This set of data shows that South Korea's trade momentum remained strong until the end of the third quarter, further supporting the Bank of Korea's view that the economy is strong enough to withstand higher borrowing costs.
The Bank of Korea raised the benchmark interest rate by 25 basis points to 3% in August for the second time in a row; previously, economic growth was stronger than expected and potential inflation continued to be stubborn, prompting policymakers to act early.
The Bank of Korea also raised its 2026 growth forecast from 2.6% to 3.3%, citing strong exports and investment driven by global AI construction. The median interest rate forecast for six months is 3.25%, which means another 25 basis point rate hike, but Governor Shin Hyun Song (Shin Hyun Song) said that this figure points to a gradual contraction after two consecutive rate hikes.
The minutes of the August meeting showed that most members supported the central bank's austerity trend to prevent inflation and financial imbalances from worsening; however, some members pointed out that the timing of further action should depend on subsequent data and the impact of the last two rate hikes.
The strength of the chip cycle has boosted corporate profits and investment in South Korea, but policymakers are still waiting to see the extent to which these benefits will drive consumer consumption and be transmitted to other sectors of the domestic economy.
Inflation is another key consideration for the Bank of Korea. Overall consumer inflation rose 3.1% in August, while core inflation, which excludes volatile food and energy prices, accelerated to 3.4%, indicating that potential price pressure remains strong. The appreciation of the won in recent months has helped curb imported inflation, providing policymakers with some flexibility when to raise interest rates next time. Steady growth in exports and the resulting improvement in South Korea's external position may support a further strengthening of the exchange rate.