Exports make up nearly 38% of Korean GDP, slowed gains this year to hurt GDP: KITA

[Photo by MK DB]

Exports contributed nearly 38 percent of South Korea’s gross domestic product (GDP) and half of annual growth of 4.1 percent last year to suggest that much of hit to the economy this year and the next on slowed global demand, showed data from the Korea International Trade Association (KITA).

According to KITA study on exports impact on the Korean economy, last year’s record exports drove 2.1 percentage points in last year’s GDP growth of 4.1 percent against a contraction in the first year of Covid-19 pandemic in 2020.

Exports made up 37.9 percent of GDP real value last year, the highest in recent five years.

Robust exports helped it add 4.05 million new jobs, with its share rising 17.8 percentage points from a year-ago period. Export-led job addition took up 14.9 percent of the total, up 2.1 percentage points on year.

Most of the new jobs, or 620,000 were in the automotive industry, 310,000 in the semiconductor business, and 300,000 in the special-purpose machinery sector (for construction, mining, metal casting and agriculture).

Exports worth $1 million created an average 6.3 new jobs – 8.9 in the special-purpose machinery sector, 8.8 in the automotive industry and 7.8 in the precision equipment market.

The report also showed that exports created $402.2 billion worth added value, equivalent to 62.4 percent of total exports. The ratio however fell by 0.9 percentage points from a year earlier due to larger added value created by imports of petroleum products and synthetic resins.

By item, semiconductor exports created the most $85.7 billion worth added value, automobiles $49.1 billion, and special-purpose machinery $23.5 billion.

“As data suggest, exports are the key to sustain economic growth,” said Jo Eui-yun, an analyst at KITA.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]