The nation could face a decline in annual exports of almost nine percent and a trade deficit of up to 41 billion U.S. dollars if the stagnation of the first quarter persists to the end of the year.

At a press briefing on Tuesday, the Korea International Trade Association(KITA) forecast exports in the first quarter will fall by 12-point-six percent amid the current slowdown, maintaining a quarterly decline through the third quarter.

The projection estimates annual outbound shipments will total 624 billion dollars, down eight-point-seven percent from last year, with imports also expected to drop nine-point-one percent to 665 billion dollars due to declining oil prices.

Under this scenario, the nation would post a trade deficit of 41 billion dollars.

If semiconductor prices partially recover in the second half, however, and external factors improve on the back of China’s reopening, KITA predicted that the export decline could stay at around three percent.

Meanwhile, the nonprofit group expected Japan's lifting of export curbs on three key materials to help reduce domestic chipmakers' procurement costs by simplifying the import process and reinforcing supply chains as the need to source them elsewhere is eliminated.