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Korea's exports are growing at a faster pace with less than three months remaining in 2024, raising hopes of surpassing Japan in outbound shipments for the first time in history.
This optimism arises as Korea has started to outpace Japan in several economic statistics and surveys released this year by institutions both domestically and internationally.
They include the Bank of Korea's (BOK) 2023 gross national Income (GNI) and International Institute for Management Development's (IMD) 2024 national competitiveness assessments.
According to the Ministry of Trade, Industry and Energy, Korea's exports in the first nine months of 2024 reached $508.8 billion, making it the second-highest total for any comparable period in the country's history.
For the June-September period, outbound shipments rose 10.7 percent year-on-year to $173.9 billion. The amount was also the second-highest for any third quarter of the year after the government began compiling relevant data.
Exports surged 7.5 percent year-on-year last month, continuing a growth streak for the 12th consecutive month.
As a result, outbound shipments reached an all-time high for any single month, totaling $58.77 billion.
Additionally, average daily exports in September reached a record high of $2.94 billion.
Containers of exports are stacked to be shipped at a port in Busan, Sept. 30. Yonhap
"All the data are certainly intriguing enough to capture public interest in whether Korea can surpass Japan in exports," said Cho Hyuk-soo, an international trade professor at Chungnam National University.
In particular, the professor highlighted that Korea reduced its export gap with Japan to a record low of $3.5 billion in the first half of 2024.
Back then, Korea's exports advanced 9 percent year-on-year to reach $334.8 billion, whereas Japan's outbound shipments retreated 3.6 percent to $338.3 billion.
“Such a narrowed gap is dramatic considering Korea used to be one of the poorest countries in the world and that it was nowhere close to Japan that once boasted the world's second-largest economy after the United States,” Cho said.
When asked about the possibility of Korea becoming a larger exporter than Japan, Kang In-won, a professor of international business and trade at Kyung Hee University, said it will depend on sustaining growth momentum in the final quarter of the year.
“Japan is picking up pace in exports, meaning Korea should also step up to catch up with its archrival and eventually take the lead,” Kang said.
He noted that Japan, after reducing the export gap with Korea to its lowest level in the first six months, has since widened the difference again in the following two months.
Japan reported $472.3 billion in exports from January to August, compared to Korea's $450.1 billion during the same period.
A trade official, who requested to remain anonymous, said aiming for over $700 billion in annual exports could position Korea to surpass Japan in the coming years.
The official noted that Japan's annual exports have surpassed $700 billion for the past three years.
Korea aims to achieve the $700 billion milestone this year, but the pace of export growth is "slightly falling short" of reaching that goal, according to the official.
“But even if Korea fails to outpace Japan in exports this year, a growing number of stats show Seoul has better economic competence than Tokyo,” Kang said.
Citing the BOK data released in June this year, he highlighted that Korea's GNI per capita reached $36,194, surpassing Japan's at $35,793 in 2023.
The finding came after the BOK adjusted the base year of national accounts to 2020 from 2015 in its regular revision of relevant statistics.
The national accounts capture all transactions occurring within an economy, including metrics like gross domestic product (GDP), currency exchange rates, and other factors that determine GNI per capita.
Korea's GNI per capita in 2023 rose to $36,194, reflecting a 7.2 percent increase from the previous figure after adjustments.
Also released in June, the IMD's 2024 national competitiveness assessment ranked Korea 20th, an improvement from its 28th position in 2023.
Japan, on the other hand, was 38th in the rankings published annually by the IMD, one of the world's leading business schools based in Switzerland.
What was noteworthy for Korea was that it ranked second only to the U.S. among the “30-50 club” countries, which have a per capita income of $30,000 and a population of over 50 million.
The U.S. ranked 12th.
In its 2024 forecast, the International Monetary Fund (IMF) projects Korea's GDP per capita to reach $34,165, surpassing Japan's forecast of $33,138.
It also projected Korea's real GDP growth to reach 2.5 percent in 2024 and 2.2 percent in 2025, surpassing Japan's estimated growth of 0.7 percent and 1.2 percent.
Speaking at the National Assembly's interpellation session last month, Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok said Korea has stronger microeconomic indicators compared to Japan, even though Tokyo surpasses Seoul in all macroeconomic indices.