South Korea's export is expected to increase 6.8 percent in the second half of the year from a year ago to record a yearly trade surplus higher than government projection, a report showed Wednesday.

According to the Institute for International Trade, run by the Korea International Trade Organization, South Korea's trade surplus is expected to come in at $18.7 billion in the second half, as its exports are forecast to reach $302.4 billion, up 6.8 percent from a year ago, with its imports rising 9.5 percent to $283.7 billion.

"A rise in exports of high-priced ships, auto parts and steels in the second half will improve the country's trade conditions," the institute said. 

However, exports of mobile phones and chips are likely to slow down due to lackluster demand and lowered prices, it said.

The country's first-half exports were estimated at $285.7 billion, up 3.3 percent from a year ago, while imports rose 3.7 percent to $265.9 billion.

For all of 2014, the country is forecast to record $38.5 billion in trade surplus, as exports are expected to gain 5.1 percent to $588.1 billion and imports are predicted to rise 6.6 percent to $549.6 billion.

The yearly figure for trade surplus is $5 billion higher than the government estimate, it said.

"The second-half exports will be weighed down by concerns over the U.S. interest rate hike, China's slowing economic growth, Iraqi crisis, and the strengthening of oil prices and the South Korean won," said Oh Se-hwan, a senior researcher at the institute. (Yonhap)