South Korea’s exports in 2024 hit an all-time high of $683.8 billion, marking an 8.2% increase from the previous year. Semiconductors, the country’s leading export item, surged 43.9% to $141.9 billion, accounting for approximately 20% of total exports. Automobile exports exceeded $70 billion for the second consecutive year, totaling $70.8 billion, while ship exports rose 18% to $25.6 billion. By region, exports to China increased by 6.6% to $133 billion, and exports to the US jumped 10.5% to $127.8 billion—both setting new records. The overall trade surplus stood at $51.8 billion, marking South Korea’s first annual surplus in three years.

South Korea’s per capita GDP in 2024 is estimated to have increased by 1.28% year-on-year to $36,024, surpassing Japan and Taiwan based on IMF standards. This growth reflects a 5.9% increase in nominal GDP and slower population growth, with improved terms of trade and rising prices acting as positive factors. However, the rising KRW-USD exchange rate offset some of the gains. If economic momentum continues, per capita GDP is expected to exceed $37,000 this year.

On February 6, international credit rating agency Fitch reaffirmed South Korea’s credit rating at AA- with a stable outlook. Despite ongoing political uncertainty, Fitch positively assessed Korea’s robust external fundamentals, macroeconomic stability, and export competitiveness. However, it warned that prolonged political gridlock could undermine policy effectiveness and fiscal soundness, potentially triggering a downgrade. Fitch revised Korea’s 2025 economic growth forecast downward to 1.7%. The government pledged to strengthen communication with global rating agencies and actively manage Korea’s external creditworthiness.

On February 25, the Bank of Korea’s Monetary Policy Board cut the benchmark interest rate by 0.25 percentage points from 3.00% to 2.75%, continuing its accommodative monetary stance. This marks the third rate cut since October 2023, reflecting slowing growth, weak domestic demand, and political uncertainty. The central bank revised its 2025 growth forecast down from 1.9% to 1.5%, while maintaining its 2026 outlook at 1.8%. Inflation is projected to remain steady at 1.9% for both 2025 and 2026.

According to Statistics Korea, the number of births in 2024 was 238,300, a 3.6% increase from the previous year—the first rebound in nine years. The total fertility rate also edged up to 0.75. The rise was attributed to more marriages and an increase in the female population in their 30s. This result aligns with the most optimistic mid- to long-term demographic projections. However, deaths still outnumbered births, leading to a natural population decline of 120,000. Korea’s fertility rate remains the lowest among OECD countries, still far below the replacement level of 1.0.

The National Assembly passed the “K-Chips Act” (an amendment to the Act on Restriction on Special Cases Concerning Taxation), expanding tax credits for semiconductor facility investments. Large and mid-sized firms will receive up to 20% in credits, while small businesses can claim up to 30%. The move is seen as crucial to enhancing Korea’s semiconductor competitiveness and keeping pace with incentives offered by the US, Taiwan, and other rivals. Industry leaders welcomed the bill, expecting it to accelerate technological and production advancements and spur a virtuous investment cycle. Business groups praised the legislation for easing pressures on the industry amid external uncertainties and boosting momentum in the Korean economy.

The Korean government launched the Quantum Strategy Committee, a cross-sector initiative including academia, industry, and research institutes, to accelerate the industrialization of quantum technology. Aiming to become a global leader in the quantum economy by 2035, Korea will ramp up large-scale R&D and infrastructure investments. Key initiatives include the development of a 1,000-qubit quantum computer, deployment of quantum communication networks and navigation sensors, and the localization of related materials, components, and equipment. The initiative also includes establishing quantum-focused graduate programs and global collaboration platforms, as well as adopting quantum cryptography in national defense.

US President Donald Trump has declared the imposition of reciprocal tariffs of at least 10% on all countries, signaling the escalation of a global trade war. South Korea, in particular, will be subject to a high 26% tariff—following China (34%) and Vietnam (46%)—effectively nullifying the zero-tariff regime under the Korea-US FTA. The US justifies its differentiated tariff rates by citing each country’s tariff and non-tariff barriers, raising concerns that key Korean exports such as automobiles and semiconductors will be severely impacted.

On April 8, Acting President Duck-soo Han held his first official phone call with US President Donald Trump, during which they reaffirmed the US-Korea alliance and discussed economic cooperation, trade balance, North Korea policy, and trilateral coordination with Japan. Both sides agreed to pursue high-level cooperation in shipbuilding and LNG sectors, hold ministerial-level talks on trade balance, as well as strengthen joint efforts for denuclearization, continued military cooperation, and regional stability through US-Korea-Japan collaboration.

On April 9, the KRW-USD exchange rate surged to KRW 1,487, its highest level since the 2009 global financial crisis. Analysts attribute the spike to growing concerns over a renewed US-China trade war, which have weakened the Chinese yuan. With the US preparing to impose tariffs of up to 104% on Chinese imports, the offshore yuan fell sharply, dragging the Korean won lower. If China continues to devalue the yuan, the won may face further upward pressure.