Recently, the Ministry of Industry and Trade Resources released data showed that in July, South Koreas exports fell by 16.5% to $503.3 billion, the tenth consecutive month of decline, recording the largest decline since May 2020.

In addition, in June, South Korea saw its first 16-month trade surplus, which was backed by rising energy prices, making it experiencing the longest trade deficit since 1997.

South Koreas nominal GDP last year was $1.6652 trillion, down 8% compared to the previous year. This is the largest drop since the global financial crisis in 2009. Currently, South Koreas economy is ranked 13th in the world.

Analysts pointed out that the U.S. interest rate hike and the “strong dollar” phenomenon are the main reasons for the weakening of the Korean yen. At the same time, South Korea’s major industries, such as semiconductors, are declining, exports to China are weakening, and energy imports are rising, all of which put pressure on the Korean yen.

IPG China’s chief economist, Ban Ki-moon, said South Korea, as a “Kinshasa” economy, plays an important role in the global economy and trade. South Korea’s economic difficulties have impacted not only its own country, but also countries with close trade relations with South Korea. South Korea’s economic instability may also affect many multinational supply chains.

Professor Liu Ziyang of the University of Jiangxi in South Korea pointed out that the recovery of the South Korean economy is far less than expected, and many economic problems intertwined and constrained the economic recovery.

South Korea, as the global economy’s “kingsworm”, its economic volatility provides a signal of early warning for the global economy. Current economic difficulties reflect the complexity and uncertainty of the global economic environment and require governments and enterprises to work together to stabilize the economic foundation and ensure the stability of the global supply chain.