South Korea's exports grew at the strongest annual rate in more than four decades in May, beating market expectations, as chip sales hit a record on a global boom in AI investment.

Exports from Asia's fourth-largest economy, a bellwether for global trade, rose 53.2 percent from a year earlier to a record high of US$87.75 billion, preliminary trade data released on Monday showed.

This exceeded the median 48.4 percent increase forecast in a Reuters poll.

It was the 12th consecutive month of exports growing on a year-on-year basis and the biggest percentage rise since January 1984.

Exports of semiconductors jumped 169.4 percent to a record monthly high of US$37.16 billion, as memory chip prices continued to rise on growing investment by US technology firms, according to the trade ministry.

Computer sales also surged 290.7 percent on AI server demand, while petroleum products climbed 46.6 percent on high oil prices. Exports of vehicles fell 5.9 percent, weighed by supply disruptions in the Middle East and the impact of US tariffs.

By destination, shipments to the US and China were up 59.1 percent and 80.9 percent, respectively. Those to the Middle East were down 7.7 percent.

Last week, the country's central bank raised its economic growth forecast for this year to 2.6 percent from 2.0 percent, after the trade-reliant economy delivered its strongest growth in nearly six years last quarter on booming chip exports.

Imports rose 20.8 percent in May to US$60.80 billion, weaker than the median 21.5 percent increase expected by economists but still the strongest since August 2022.

The country's trade balance stood at a surplus of US$26.95 billion, wider than US$23.75 billion in the previous month and an all-time high.



Edited by Altis Wong