Export Share Rises to 16.1%... Economic Growth Accelerates Led by Semiconductors

The production scale of the Korean economy grew by 4.6% compared to the previous year, recording 7,114 trillion won. In particular, the increase in semiconductor exports following the AI craze acted as a key driver for economic growth, resulting in an expanded export share.

According to the '2024 Input-Output Tables' released by the Bank of Korea, the total scale of goods and services produced domestically or supplied through imports in 2024 is 7,114 trillion won. This is a 4.6% increase compared to 2023. In terms of economic growth, the contribution of exports was more prominent than domestic demand. While the share of domestic demand in the overall economy decreased, the export share rose from 14.7% in 2023 to 16.1% in 2024, showing an export-oriented growth trend.

Manufacturing growth, including semiconductors and ships, drives value-added

In terms of industrial structure, the shares of both the service industry and manufactured goods increased, but the progress of the manufacturing industry was notable. Manufactured goods accounted for 41% and the service industry accounted for 48% of the total output of all industries. Particularly in the manufactured goods sector, manufacturing, including semiconductors and ships, led the growth, resulting in a higher share compared to 2023.

In the composition of value-added by industry, the service industry accounted for the largest share at 64%. The value-added share of manufactured goods also rose along with the growth of the manufacturing industry. Value-added refers to the newly created value when raw materials are input to make and sell products, and the sum of the value-added of all industries becomes the Gross Domestic Product (GDP). In 2024, the surge in global memory semiconductor demand due to expanded AI investment significantly increased semiconductor export values, supporting the growth of the manufactured goods sector.

The role of exports also grew in terms of final demand. The export share in 2024 increased noticeably from 29% in 2023 to 32%. On the other hand, the import inducement coefficient fell to 0.296, suggesting that import dependency has decreased and more value-added generated during the production process remained within the country. The value-added inducement coefficient rose to 0.76 compared to the previous year.

Consumption has the largest employment inducement effect... Number of employed persons decreases slightly

The pattern of production activities leading to jobs showed a somewhat complex appearance. As of 2024, the number of employed persons in all industries was 25.96 million, a decrease of 28,000 compared to 2023. However, in terms of the quality of employment, it is characterized by an increase in the proportion of regular workers and female workers.

Looking at the employment creation effect by type of economic activity, the influence of consumption was the greatest. Comparing the number of employed persons induced when 1 billion won of final demand occurs (employment inducement coefficient), consumption was the highest at 9.7 people. This was followed by investment and then exports. This shows that consumption activity is the most powerful driver in inducing employment for the entire economy.

Meanwhile, the total production inducement coefficient for South Korea in 2024 was recorded at 1.808. This means that when 1,000 won of final demand occurs, the total production amount induced in our entire economy is 1,808 won, which is an indicator showing how much the demand of one industry pulls up the production of other related industries.

Source: original video (YouTube)