Kim Yong-beom, Deputy Minister of Economy and Finance, "High Possibility of Trade Deficit This Month for the First Time in 99 Months" (Update)

Kim Yong-beom, 1st Vice Minister of Strategy and Finance. (File photo)

[Asia Economy Reporter Joo Sang-don] Kim Yong-beom, the 1st Vice Minister of the Ministry of Economy and Finance, stated on the 29th, "If the current trend continues, there is a high possibility that the trade balance will record a deficit for the first time in 99 months since January 2012."

Vice Minister Kim made this remark during the 1st Emergency Economic Central Countermeasures Headquarters regular briefing held at the Government Seoul Office.

In fact, exports from the 1st to the 20th of this month amounted to $21.7 billion, down 26.9% compared to the same period last year, while imports were $25.2 billion, down 18.6%, resulting in a trade deficit of about $3.5 billion.

Vice Minister Kim expressed concern, saying, "Exports, which had somewhat held up until March, have seen a significant increase in the rate of decline since April due to production disruptions, a sharp drop in oil prices, and the full impact of global demand contraction. April exports are expected to show the largest monthly decrease since the global financial crisis."

Regarding the deterioration of the trade balance in April, he explained that several special circumstances and factors contributed to this outcome. Vice Minister Kim said, "The first cause is that, due to successful quarantine measures, the domestic demand situation in our country has shown a better trend compared to other countries. Because the domestic economy is relatively better off than major countries, imports have decreased less than exports, temporarily worsening the trade balance." He added, "Considering various aspects comprehensively, even if a trade deficit occurs in the short term, it should not be viewed solely as a negative sign for our economy."

Regarding the service sector production in March, which decreased for two consecutive months and recorded the largest decline since statistics began, he analyzed, "This confirms that the current crisis is centered on the service industry." Vice Minister Kim said, "Accommodation, food services, retail, transportation, culture, and leisure, which are closely related to the livelihood economy, have sharply declined. Together with recently released employment indicators, this confirms that the COVID-19 situation has dealt a significant shock to our domestic demand and livelihood sectors in the first quarter." He added, "In March, both the coincident index (-1.2 points) and the leading index (-0.6 points) fell by the largest margins since the global financial crisis, indicating that the recent economic situation and future conditions are challenging."

This content was produced with the assistance of AI translation services.