Asianfin -- South Korea's semiconductor exports experienced a real-term decline last quarter, posing a risk to the nation’s economic growth outlook, according to a Bloomberg Economics analysis. This trend could influence the Bank of Korea (BOK) to accelerate its interest rate cuts next year.

In August and September, semiconductor exports fell by 7.6% and 7.5%, respectively, after adjusting for price changes, contributing to an overall third-quarter decline of 5.3%, as noted by BE economist Hyosung Kwon.

While strong global demand for South Korean technology products, particularly memory chips, has helped sustain economic growth in recent quarters, a downturn in exports could negatively impact this momentum and raise concerns about future growth.

Last week, the BOK lowered its benchmark rate by a quarter-percentage point to 3.25% in response to cooling inflation and property prices. Kwon suggests that the decline in chip exports may have influenced this decision, although BOK Governor Rhee Chang-yong has resisted calls for a more aggressive rate-cutting approach.

Real exports play a crucial role in gross domestic product (GDP), which the BOK anticipates will grow by 2.4% this year. In nominal terms, semiconductor exports have been a major driver of overall export growth, buoyed by rising global demand for artificial intelligence technologies.