The state-run Export-Import Bank of Korea (Exim Bank) said Sunday the country's exports are expected to expand up to 12 percent on-year over the first quarter on strong demand for chips and cars.

Outbound shipments over the January-March period are estimated to reach around $145 billion won, according to the estimate provided by the bank.

"The economic recovery of major export destinations, including China, the United States and the European Union, is expected to lend a hand to the recovery," an official from the bank said.

China and the US are the country's top two export partners, accounting for roughly 40 percent of the total outbound shipments.

The bank also pointed out that the strong demand for chips and automobiles will especially speed up the exports.

The growth, however, can be limited due to looming COVID-19 variants, known to be much more contagious, along with the delayed supply of vaccines.

South Korea's exports, meanwhile, decreased 5.4 percent in 2020 from the previous year amid the new coronavirus pandemic.

In January, however, exports rose 11.4 percent on-year to extend their on-year gains for a third consecutive month on the back of brisk demand for chips and cars. (Yonhap)