South Korea’s exports gather pace as AI-related chip boom aids surge

South Korea’s exports extended their strong growth in August as artificial-intelligence demand powered chip shipments and the broader economy, giving the central bank little reason to retreat from its newly hawkish stance after back-to-back interest-rate hikes.Exports adjusted for working-day differences climbed 72.5% last month from a year earlier, the customs office said Tuesday. Imports increased 22.5%, resulting in a trade surplus of $34.7 billion.

On an unadjusted basis, shipments rose 68.7%, compared with a revised 63% gain for the full month of July.Semiconductors continued to remain the primary driver of South Korea’s export growth in August.The data suggest external demand remains resilient even as higher energy prices and geopolitical tensions weigh on other industries, reinforcing the Bank of Korea’s decision last week to raise its benchmark rate by a quarter percentage point for a second straight meeting.

The bank also upgraded its 2026 growth forecast to 3.3% from 2.6%, giving policymakers more room to focus on inflation.Headline inflation slowed more than expected to 2.8% in July, but core inflation, which strips out volatile food and energy prices, accelerated to 2.6%, suggesting underlying price pressures remain firm. Meanwhile, the economy expanded 0.6% in the second quarter from the previous three months, beating economists’ expectations.The central bank left its price growth forecasts unchanged, saying it still expects consumer inflation of 2.7% this year and 2.3% in 2027.

Core inflation, which excludes volatile energy and food prices, is projected at 2.5% for both this year and next, a slight upgrade for both years.BOK Governor Shin Hyun Song said the back-to-back rate hikes can help stabilise the currency market and allow for further won gains, adding that he still sees room for the won to strengthen further.South Korea’s currency has surged sharply in recent months, strengthening beyond 1,400 per dollar while outperforming all of its Asian peers last month, a rebound that should help curb imported inflation.Also Read: Anthropic signs $35 billion cloud deal with Nvidia-backed Lambda, says report