Has South Korea's Trade Dependency Decreased Amid Global Uncertainties?
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Synopsis
In a year marked by economic challenges, South Korea's trade dependency has significantly declined. Discover how weak exports and falling raw material prices are reshaping the nation's economic landscape, and what this means for the future. Stay informed with the latest insights into the South Korean economy.
Key Takeaways
- Trade dependency in South Korea has decreased in 2023.
- Overall industrial transactions fell by 0.1 percent.
- Exports totaled US$632.6 billion, down 7.4 percent.
- Imports fell by 12.1 percent.
- ICT sector exports rose by 19 percent in early 2025.
Seoul, Sep 24 (NationPress) The South Korean economy has shown a reduced reliance on trade in 2023, attributed to weak export performance and a decline in raw material prices amidst ongoing global economic uncertainties, as reported by the central bank on Wednesday.
The total industrial transactions in the country decreased by 0.1 percent compared to the previous year, totaling 6,802.7 trillion won (approximately US$4.88 trillion) in 2023, according to data from Yonhap news agency.
External transactions, which include both exports and imports, accounted for 29.6 percent of the total, reflecting a drop of 1.9 percentage points from the previous year, as detailed in the industrial input-output analysis report by the Bank of Korea (BOK).
The BOK noted that exports declined primarily in the sectors of petrochemicals, electronics, and optical devices, while imports decreased due to lower prices of raw materials like crude oil and liquefied natural gas (LNG).
Domestic production represented 85.1 percent of total industrial output in 2023, an increase of 1.1 percentage points from the previous year, whereas imports fell to 14.9 percent, down from 16 percent in 2022.
In 2023, exports reached US$632.6 billion, marking a 7.4 percent decrease compared to the previous year, primarily due to sluggish semiconductor demand influenced by global monetary tightening and the slow recovery of China's economy.
Imports also fell, by 12.1 percent, reaching $642.7 billion, resulting in a trade deficit of $9.97 billion.
On a more positive note, South Korea's exports in the information and communication technology (ICT) sector grew by 19 percent in the first half of 2025 compared to the same period last year, largely driven by game content.
ICT service exports totaled US$6.37 billion from January to June, up from $5.81 billion in the same timeframe last year, according to data from the Ministry of Science and ICT.
Imports in this sector rose to $4.8 billion, reflecting a 12.3 percent increase year-on-year and resulting in a trade surplus of $1.57 billion.
In terms of sector performance, game content comprised 44 percent of total ICT service exports, followed by information services at 15 percent and packaged software at 13 percent.
Geographically, Asia accounted for 55 percent of these exports, with North America at 28 percent and Europe at 15 percent, as per the data.
Point of View
It is essential to recognize that the South Korean economy's reduced trade dependency is indicative of broader global trends. This shift reflects both challenges and opportunities, particularly in the ICT sector, where growth is evident. Moving forward, it is crucial for South Korea to adapt and innovate in response to these changing dynamics.
NationPress
24/09/2025
Frequently Asked Questions
What caused the decline in South Korea's trade dependency?
The decline in South Korea's trade dependency in 2023 was primarily due to weak exports and falling raw material prices amid global economic uncertainties.
How much did South Korea's exports decrease in 2023?
In 2023, South Korea's exports totaled US$632.6 billion, which represents a 7.4 percent decrease from the previous year.
What sectors saw a decline in exports?
Exports decreased mainly in the sectors of petrochemicals, electronics, and optical devices.
What was the trade deficit for South Korea in 2023?
South Korea experienced a trade deficit of $9.97 billion in 2023.
Which sector showed growth in exports in early 2025?
The information and communication technology (ICT) sector showed a 19 percent growth in exports in the first half of 2025, driven mainly by game content.
