South Korea boasts one of the world’s most advanced economies, driven by technological innovation and industrial prowess. South Korea achieved its rapid economic rise largely through effective export-oriented industrialization. The country’s top exports are “electrical machinery and electronics ($17.4B), cars, tractors, trucks, and parts thereof, ($8.09B), and machinery, mechanical, appliance, and parts” (South Korea (KOR) exports, imports, and trade partners, 2024). This transformation saw the country’s GDP per capita increase from a mere US$64 in 1955—one of the lowest globally—to US$34,160 in 2024 (Economic Report 2024 REPUBLIC OF KOREA, 2024). After the pandemic, there has been slow economic growth in Korea, with a record slow of 4.15% in 2021 and 2.59% in 2022 (South Korea – market overview 2023). In 2023 GDP growth slowed to 1.3% in South Korea because of the “high debt-servicing burden, which reflects elevated interest rates, and above-target inflation” (Jones, 2024). Jone (2024) predicts that South Korea’s global GDP will remain around 3% in 2024 and 2025, according to the OEDC Economic Outlook released in May. Despite these challenges, South Korea continues to invest heavily in technology and innovation to sustain its economic momentum. The government is also focusing on structural reforms to address high debt and inflation issues, aiming to stabilize the economy. These efforts reflect South Korea’s resilience and commitment to maintaining its status as a leading global economy.
South Korea is an export-driven economy. The top countries South Korea exports to are China, the United States, Vietnam, Japan, and Hong Kong (South Korea (KOR) exports, imports, and trade partners 2024). The South Korean Won (KRW) has been an important factor in the economic stability and growth of Korea. Eugene Jeung (2022) from Seoul Scholars International Math & Science explains the exchange the USD to KRW has a large impact on Korea’s economy. The increased value of the USD would increase costs for good materials and could lead to inflation in Korea’s economy (Khanal, 2024). This would also lead to the “competitiveness of South Korean, exports, making them more expensive for foreign buyers” (Khanal, 2024). There has been a 7% drop in the South Korean currency against the USD (Seok-Min, 2024). This drop stems from the Russia-Ukraine war and the tension in the Middle East (Seok-Min). Concerns about the depreciation of the KRW highlight the need for robust economic policies to mitigate external shocks and maintain economic stability.
