It seems that the economic policy, which attempted to rebound rapidly, led by exports, was exposed to the blow of inflation as the soaring import prices and the decline in semiconductors overlapped.
Reagannomics' supply-leading economic strategy, the export-led sharp rebound, and fiscal input to stimulate domestic demand is being hit by a decline in semiconductors and a sharp rise in import prices.
The October import price index (100 in 2015) jumped 35.8% from the previous year to 130.43, a 4.8% increase from the previous month (September, 124.40), the highest in 13 years following the financial crisis in October 2008 (47.1%). According to the Bank of Korea's export-import price index statistics, the import price index rose for the sixth consecutive month since May compared to the previous month, reaching the highest level in October.
The export price index in October rose 1.6% from 114.38 in September to 116.18, up 25.3% from the previous year, falling behind the import price index.
Due to the Moon Jae-in administration's strong export-led strategy, exports have risen for the 11th month since November last year (0.6%), but the import price index has overtaken them.
Semiconductors, the main player in the rapid economic rebound of the corona virus, fell by 3.5% in the export price index, which started a downward trend since negative (-) in December last year, making the export price index less likely than imports in the future.
In October, exports of computers, electronics, and optical equipment, the beneficiaries of the corona supply economy, fell by 2.2% (from the previous month), and coal and petroleum products (12.3%), chemical products (2.2%), 1 Vehicle metal products (1.9%) rose.