South Korea‘s exports grew at a year-on-year rate of 25.8% in 2021, to $ 644.54 billion, reported that nation’s Ministry of Commerce, Industry and Energy.
The maximum forecast of that indicator was achieved in 2018, when South Korean external sales were for 604.9 billion dollars.
Conversely, South Korea’s imports climbed 31.5% to $ 615.05 billion, also a record high.
That country’s real GDP grew 6% during the four quarters ending in June 2021, after a modest contraction in the first half of 2020.
According to the US Department of the Treasury, Korean authorities supplemented strong public health measures to limit the spread of Covid-19 with accommodative fiscal policy measures.
Authorities implemented an expanded budget for 2021 and two projected ancillary spending packages to bring the fiscal deficit to 4.4% of GDP, roughly the same as the previous year.
South Korea Exports
Thus, the increase in both sales and external purchases in 2021 helped the Korean economy to record a record trade volume of US $ 1.25 trillion.
In particular, South Korea’s exports in key industries such as semiconductors and petrochemicals also reached record levels.
With a low debt-to-GDP ratio of about 47%, Korea has ample fiscal space to support medium-term growth and reduce fiscal spending gradually as conditions permit.
In addition, the Treasury Department noted that the monetary authorities largely maintained pandemic-related support measures to ease monetary conditions and support Korea’s economic recovery for much of 2021, but the Bank of Korea (BOK) implemented a 25 basis point rate increase in August 2021 to address growing financial imbalances.
Korea’s current account surplus widened to 5.7% of GDP during the four quarters ending June 2021, compared with 3.5% in the same period a year earlier.
The expansion was driven by an increase in the balance of goods and a reduction in the services deficit, which continued to be impacted by the distortions related to Covid-19.