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Exports Fuel South Korea’s Growth Despite Domestic Investment Slump

Reduced tariffs under a new U.S.-South Korea trade deal are bolstering semiconductor exports.

Shipping containers are seen at Pyeongtaek port in Pyeongtaek, South Korea, April 15, 2025.   REUTERS/Kim Hong-Ji/File Photo
A port in the southeastern city of Busan on July 31, 2025 (Yonhap)
Cars are waiting to be exported at a port in the southeastern city of Ulsan on July 31, 2025. (Yonhap)
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Overview

  • Industrial output rose 1.2 percent in June driven by a 6.6 percent gain in semiconductor production and a 4.2 percent increase in automobile output.
  • Retail sales edged up 0.5 percent in June as stronger demand for clothing and cosmetics supported consumer spending.
  • Facility investment contracted 3.7 percent in June for a fourth straight month, led by a sharp pullback in transportation equipment outlays.
  • July exports increased 5.9 percent year-on-year to $60.82 billion, surpassing forecasts ahead of an August deadline for higher U.S. tariffs.
  • Semiconductor shipments jumped 31.6 percent to $14.71 billion, marking an all-time July high, while automobile and ship exports rose 8.8 percent and 107.6 percent respectively under reduced tariff uncertainty.