S.Korea in for longest monthly trade deficit spell in 25 yrs

The trade deficit in the first 10 days of September reached $2.44 billion, more than a 1.5-fold increase from the year-earlier period

Trade shortfalls threaten to push the won even further lower to test the 1,400 threshold to the dollar 
Trade shortfalls threaten to push the won even further lower to test the 1,400 threshold to the dollar 
Byung-Uk Do 2
2022-09-14 11:00:16 dodo@hankyung.com
Economy

South Korea is poised to report a trade deficit for a sixth straight month in September, which would mark its longest period of trade shortfalls in 25 years.

The trade deficit in the first 10 days of this month reached $2.44 billion, provisional data from the Korea Customs Service showed on Tuesday.

A surge in global energy prices bumped up the country’s imports of natural gas by 92.3% in value during the period on a customs clearance basis, with crude oil imports up 15.7%.

For exports, the sectors of automobiles, steel and wireless electronics goods suffered double-digit falls in shipments in the Sept.1-10 period of this month. The figure offset an increase in exports of semiconductor and petrochemical products.

Overall, South Korea’s exports decreased by 16.6% on-year to $16.25 billion won during the Sept.1-10 period. Imports shriveled by 10.9% to $18.69 billion due to shorter working days compared with a year-earlier period.

If it posts a trade deficit for the whole month of September, it will be the country's longest spell of trade shortfalls since the January-May period of 1995.

Since the beginning of this year, Asia’s No. 4 economy has run trade deficits of a cumulative $27.55 billion through Sept. 10.

The figure already surpassed the $20.62 billion shortfalls recorded for the full year of 1996 and would mark its first trade deficit for a full year since the 2008 global financial crisis.

Month-on-month, the Sept. 1-10 trade deficit narrowed by almost 70% to $7.7 billion due in part to reduced working days on the back of the Korean thanksgiving holiday, or Chuseok.

But the figure marked more than a 1.5-fold increase from the $1.48 billion deficit posted in the year-earlier period.

In August of this year, the world’s fifth-largest oil importer logged a record trade shortfall of $9.5 billion since it started compiling the data in 1966.

Mounting trade shortfalls threaten to push the won even further lower to test the 1,400 threshold to the dollar. The Korean currency has been traded at its lowest point in nearly 13 and a half years against the dollar.

As for China, its largest export market of semiconductor chips and other major products, South Korea turned to a trade surplus of $895 million in the first 10 days of this month, reversing the past four consecutive months of shortfalls.

Write to Byung-Uk Do at dodo@hankyung.com
Yeonhee Kim edited this article
#Korea economy #Korea trade deficit #Korea won #Korea-customs-service

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