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South Korea’s January Inflation Slows to 2% as Exports Jump 34%

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  • This undated file photo, provided by Samsung Electronics Co., shows the company's semiconductor production line in the city of Pyeongtaek, about 60 kilometers south of Seoul. (PHOTO NOT FOR SALE) (Yonhap)
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    This undated file photo, provided by Samsung Electronics Co., shows the company's semiconductor production line in the city of Pyeongtaek, about 60 kilometers south of Seoul. (PHOTO NOT FOR SALE) (Yonhap) Source Full size
  • Containers await shipment at a port in Pyeongtaek, about 60 kilometers south of Seoul, on Jan. 27, 2026. (Yonhap)
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    Containers await shipment at a port in Pyeongtaek, about 60 kilometers south of Seoul, on Jan. 27, 2026. (Yonhap) Source Full size
  • This April 13, 2025, file photo shows a supermarket in Seoul. (Yonhap)
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    This April 13, 2025, file photo shows a supermarket in Seoul. (Yonhap) Source Full size
  • This April 13, 2025, file photo shows a supermarket in Seoul. (Yonhap)
    Image: Yonhap
    This April 13, 2025, file photo shows a supermarket in Seoul. (Yonhap) Source Full size
  • Containers await shipment at a port in Pyeongtaek, about 60 kilometers south of Seoul, on Jan. 27, 2026. (Yonhap)
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    Containers await shipment at a port in Pyeongtaek, about 60 kilometers south of Seoul, on Jan. 27, 2026. (Yonhap) Source Full size
  • Containers await shipment at a port in the southeastern port city of Busan on Jan. 28, 2026. (Yonhap)
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    Containers await shipment at a port in the southeastern port city of Busan on Jan. 28, 2026. (Yonhap) Source Full size
  • Lee Doo-won, an official from the Ministry of Data and Statistics, speaks to reporters at the government complex in Sejong on Jan. 30, 2026. (Yonhap)
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    Lee Doo-won, an official from the Ministry of Data and Statistics, speaks to reporters at the government complex in Sejong on Jan. 30, 2026. (Yonhap) Source Full size

CPI shows modest 2% year‑on‑year rise, lowest in five months In January, the consumer price index rose 2 percent from a year earlier, the smallest increase since August 2025, while core CPI edged higher at 2.3 percent [1]. Petroleum product prices were essentially flat year‑on‑year, offsetting other price pressures as Dubai crude fell to the $60‑range [1]. Egg prices surged 6.8 percent due to avian influenza, contributing to the overall food‑price increase [1].

Export performance hits record levels, driven by AI‑related chips January exports climbed 33.9 percent YoY to $65.85 billion, the highest January total on record and the first to exceed $600 billion [2]. Semiconductor shipments more than doubled, up 102.7 percent to $20.54 billion, reflecting soaring AI‑server demand and higher memory‑chip prices [2]. Wireless devices and computers also posted strong gains, up 66.9 percent and 89.2 percent respectively, while the trade surplus widened to $8.74 billion [2].

Industrial output growth remains weak despite semiconductor surge Total industrial production for 2025 grew only 0.5 percent YoY, the slowest expansion since 2020 [3]. Semiconductor output, however, jumped 13.2 percent, underscoring the sector’s role in offsetting broader slowdown [3]. Mining and manufacturing added 1.6 percent, but construction orders fell 16.2 percent, highlighting uneven sectoral performance [3].

Holiday season could pressure food and agricultural prices Officials warned that the Lunar New Year (Feb. 16‑18) may lift agricultural, livestock and fishery prices, even as the government prepares stabilization measures [1]. Rice, apples and mackerel already posted double‑digit price jumps of 18.3 percent, 10.8 percent and 11.7 percent respectively [1]. The timing coincides with the strongest export month, suggesting divergent trends across the economy [2].

Sources

Timeline

2020 – South Korea’s total industrial production contracts amid the COVID‑19 pandemic, marking the last year of output decline before the 2025 slowdown to a five‑year low [3].

Dec 3, 2024 – President Yoon Suk‑yeol declares martial law, sparking a market crash that drives the won to multiyear lows and the KOSPI toward 2,300 points, the sharpest shock in years [30].

Dec 30, 2025 – Inflation eases to 2.1% YoY, the lowest in five years and near the Bank of Korea’s 2% target, while December’s 2.3% rise reflects a weak won and higher petroleum costs [15].

Dec 29, 2025 – Business lobbies KCCI and FKI press the government for aggressive AI‑led growth in 2026, urging swift investment projects, policy predictability, and reforms to fair‑trade rules [16].

Dec 25, 2025 – The Bank of Korea lifts its 2026 growth forecast to 1.8% on an AI‑chip upturn, citing strong semiconductor demand and a record‑high export performance in November [17].

Dec 25, 2025 – A Korea Enterprises Federation study finds Korean manufacturing wages exceed Japan’s by 27.8% and Taiwan’s by 25.9% in PPP terms, warning that the wage premium could erode competitiveness without matching productivity [18].

Dec 24, 2025 – The Ministry of Trade, Industry and Resources sets a target of $70 billion in annual consumer‑goods exports by 2030, leveraging Hallyu’s global appeal and focusing on cosmetics, foodstuffs and design [19].

Dec 21, 2025 – Exports climb 6.8% in the first 20 days of December to $43 billion, with chip shipments up 41.8% to $11.65 billion, while auto exports fall 12.7% and the trade surplus widens to $3.8 billion [20].

Dec 20, 2025 – Automobile exports rise 13.7% in November to $6.4 billion, driven by eco‑friendly and hybrid models; U.S. shipments increase 5.1% after a tariff cut to 15% [21].

Dec 4, 2025 – President Lee Jae‑Myung orders a supply‑and‑demand review of key consumer goods and urges probes of price‑fixing as inflation hits 2.4% YoY, exceeding the 2% target for the third month [23].

Dec 4, 2025 – The Bank of Korea projects full‑year growth near 1% after Q3 GDP rises 1.3% (fastest since late 2021), but notes the reform agenda stalls and the manufacturing survey index stays below benchmark for 21 months [22].

Dec 2, 2025 – Q3 GDP climbs 1.3% YoY to 1.8%, with exports up 2.1% and facilities investment up 2.6%; the BOK lifts its 2025 growth outlook to 1% while keeping policy rates steady [24].

Dec 2, 2025 – The OECD maintains its 2025 growth forecast at 1% and projects a rise to 2.1% in both 2026 and 2027, citing fiscal stimulus and low unemployment but warning of tariff‑related export risks [25].

Dec 1, 2025 – Electric‑equipment exports reach $7.13 billion Jan–Nov, up 11.3% YoY, led by the United States (37.2% share) as AI‑driven data‑center demand fuels growth [26].

Dec 1, 2025 – Consumer‑price inflation hits 2.4% YoY in November, with agricultural goods up 5.6% and petroleum products up 5.9%, pushing core inflation to 2.9% and prompting the ministry to monitor price swings [27].

Nov 30, 2025 – Industry Minister Kim Jung‑kwan credits the 8.4% November export surge to strong semiconductor, auto and bio‑health performance and notes a $350 billion U.S. investment bill meeting tariff‑reduction conditions [28].

Nov 30, 2025 – November exports rise 8.4% to $61.04 billion, with semiconductor shipments up 38.6% to $17.26 billion and auto exports up 13.7% to $6.41 billion, expanding the trade surplus to $9.73 billion [29].

Nov 29, 2025 – After the Dec 3 2024 martial‑law shock, Q1 2025 GDP contracts 0.2% and the IMF cuts 2025 growth forecasts to about 0.8%; a later $350 billion U.S. investment package lifts expectations and spurs a Q3 rebound [30].

Jan 1, 2026 – South Korea posts a record $709.7 billion in 2025 exports, a 3.8% rise led by a 22.2% jump in semiconductor shipments to $173.4 billion, while imports slip 0.02% and the trade surplus hits $78 billion, the largest since 2017 [13].

Jan 1, 2026 – Editorials call for structural reform in 2026 to escape a low‑growth trap, citing political turmoil, a weak won, rising housing costs and upcoming June local elections as catalysts for decisive action [14].

Jan 8‑9, 2026 – South Korea records its largest‑ever November current‑account surplus of $12.24 billion—the highest since 1980—with a goods surplus of $13.31 billion and an 11‑month cumulative surplus of $101.82 billion [12][11].

Jan 9, 2026 – The government unveils a policy package targeting 2% real GDP growth in 2026, prioritizing a “super‑innovation economy” to make Korea the world’s No. 2 semiconductor power and to boost AI, defense and biotech sectors [10].

Jan 15, 2026 – K‑pop album exports top $301.7 million in 2025, a 3.4% increase, with Japan remaining the largest market despite a 10.2% decline, while total album sales fall to 93.5 million copies, reflecting a weakening domestic market [4].

Jan 21, 2026 – Exports rise 14.9% in the Jan 1‑20 window to $36.36 billion, imports grow 4.2% to $36.98 billion, and outbound shipments for the year hit a record $709.7 billion, underscoring sustained export momentum [7].

Jan 22, 2026 – South Korea’s economy expands 1% in 2025, the slowest since 2020, while Q4 contracts 0.3% QoQ; semiconductor exports add up to 0.9 percentage points to growth, and the BOK projects 2026 growth at 1.8% on the chip upcycle [6].

Jan 25, 2026 – A Southernpost survey finds 54% of economists expect 2026 growth around 1%, 36% foresee 2% from 2027 onward, and the average 2026 forecast of 1.8% falls short of the government’s 2% target; most warn tariff talks could hurt exports [5].

Jan 30, 2026 – Industrial output for 2025 slows to a 0.5% YoY increase, the weakest since 2020, while semiconductor production surges 13.2% and retail sales turn positive after four years, highlighting sectoral divergence [3].

Feb 1, 2026 – January exports jump 33.9% YoY to $65.85 billion, a record for the month, driven by a 102.7% surge in semiconductor shipments to $20.54 billion and strong AI‑server demand; the trade surplus widens to $8.74 billion [2].

Feb 3, 2026 – The January consumer‑price index rises 2% YoY, the slowest increase in five months as petroleum prices stabilize; food items such as rice and mackerel see double‑digit jumps, and officials warn the upcoming Lunar New Year (Feb 16‑18) could lift agricultural prices [1].

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