Korean Industrial and Economic Outlook for 2024

For the year 2024, the domestic economic landscape is poised for an incremental expansion hovering around the two percent mark. This modest upward trajectory is undergirded by the rejuvenation of the IT sector, which in turn is stimulating an upward trend in both export activity and capital investment. However, this anticipated growth is tempered by subdued consumer spending and a contraction in construction investment. External risks include uncertainties surrounding global inflation, financial sector instability resulting from sustained high-interest rates in major economies, geopolitical uncertainties arising from conflicts or wars, and the pace of recovery in the semiconductor industry. Domestically, household debt issues are a major source of uncertainty. In 2024, exports are set to expand in most of 13 flagship industries, with export values set to reach USD 504.7 billion, representing 5.2 percent growth compared to 2023. This growth is notable given the current global economic environment, and only the petrochemicals and rechargeable batteries sectors are expected to record negative export growth. With regards to domestic demand, the IT industry is poised for a rebound in 2024, driven by the introduction of new ICT products and heightened demand for intermediate goods destined for export markets. Only modest growth is expected in the materials industry, however, as economic indicators for that sector just ticked upward in the second half (H2) of 2023. Overall, production in Korea's 13 flagship industries should expand in 2024, particularly in new IT industries, which are benefitting from the recovery in both exports and domestic demand. Conversely, a marginal decline in production is projected for the machinery industry. Finally, imports are set to jump in 13 flagship industries by 5.8 percent in 2024, fueled by the recovery of the domestic IT market.