South Korea's exports extend strong growth in the first 20 days of October, chip exports surge 222.5%.

Due to robust global artificial intelligence (AI) demand driving semiconductor shipments, South Korea's exports maintained strong growth in the first 20 days of October, highlighting the resilience of the South Korean economy as the Bank of Korea prepares to announce its interest rate decision. Data released by Korea Customs on Wednesday showed that, after adjusting for working day differences, exports in the first 20 days of October rose 65.9% year-on-year. By comparison, the increase in the same period of September was 89.8%. On an unadjusted basis, exports in the first 20 days of October grew 105.4%, imports rose 42.8%, and the trade surplus reached $14.5 billion. Total exports for the first 20 days of the month were $61.6 billion; after exports reached $71.4 billion in the same period of September, the growth momentum is continuing. Because this year's Mid-Autumn Festival holiday fell in September and last year's in October, the year-on-year data are distorted. Working-day-adjusted data better reflect the underlying trend. The semiconductor industry remains the main engine of economic growth, with chip exports surging 222.5% year-on-year to $27.5 billion. Petroleum product exports rose 68.3%, and automobile exports increased by nearly 41%. It is reported that South Korea's exports of products such as semiconductors, automobiles, and batteries occupy an important position in global supply chains, so its export data are often regarded as a "canary" reflecting global trade trends and the temperature of the economy. These data further indicate that the semiconductor boom is supporting South Korea's economic growth while also keeping inflation elevated. The data will also provide a key economic reference for the Bank of Korea's interest rate decision on Thursday. The market widely expects the Bank of Korea to keep interest rates unchanged to weigh the impact of recent rate hikes. In August, the Bank of Korea raised its benchmark interest rate by 25 basis points to 3%, the second consecutive hike. Stronger-than-expected economic growth and persistently high inflation prompted policymakers to take preemptive measures. Bank of Korea Governor Shin Hyun-song said the central bank will maintain a tight monetary policy stance until it is confident that inflation will fall back to the 2% target. South Korea's overall inflation rate fell to 2.9% in September from 3.1% a month earlier, but it remains significantly above the central bank's target. Shin Hyun-song has said that the Middle East war and the AI boom are both increasing inflationary pressure. Excluding volatile food and energy prices, core inflation in September was 2.8%. The strong performance of South Korea's chip industry has boosted corporate earnings and investment, but policymakers are still assessing how broadly these gains can pass through to household consumption and the wider domestic economy. By export destination, in the first 20 days of October, South Korea's exports to China rose 154.4%, and exports to the United States rose 154.9%; exports to Malaysia and Singapore grew 363.2% and 121.1%, respectively.