[Weekly Outlook] Trade Deficit 'Emergency' Due to Ukraine Crisis... Consumer Sentiment Also in Focus

Trade Deficit Shows Red Light Amid Oil Shock
Consumer Sentiment Shrinks Due to Omicron Spread
Corporate Business Sentiment Declines for Second Consecutive Month

March 1-20 Exports Increase by 10.1%... Trade Deficit of 2.08 Billion Dollars
(Busan=Yonhap News) Reporter Kang Deok-cheol = On the morning of the 21st, export and import cargo was piled up at Gamman Pier in Busan Port. Exports increased by more than 10% compared to the same period last year through March 20. The Korea Customs Service announced on the 21st that the export amount (provisional customs clearance basis) from March 1 to 20 was 37.256 billion dollars, an increase of 10.1% compared to the same period last year. On the other hand, the trade balance during this period showed a deficit of 2.078 billion dollars. 2022.3.21
kangdcc@yna.co.kr
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[Asia Economy Sejong=Reporter Lee Jun-hyung] Next week, the export-import trends for this month will be announced. Due to the prolonged Ukraine crisis, the trade balance is expected to turn into a deficit this month. The Consumer Confidence Index (CCSI) and the Business Survey Index (BSI), which reflect the impact of COVID-19 on consumer sentiment and the real economy, will also be released.

According to related ministries on the 27th, the Ministry of Trade, Industry and Energy will announce the "March 2022 Export-Import Trends" on the 1st of next month. The trade balance recorded a deficit for two consecutive months from December last year to January this year. Last month, thanks to improved performance in key items such as semiconductors, it succeeded in turning to a surplus, but from the 1st to the 20th of this month, it recorded a deficit of 2.08 billion dollars. Exports increased by 10.1% year-on-year to 37.256 billion dollars, but imports (39.334 billion dollars) increased by 18.9%, surpassing the export growth.

The trade balance is highly likely to return to a deficit this month. This is because energy prices are soaring due to geopolitical conflicts such as the Ukraine crisis. This explains why imports increased by 18.9% year-on-year from the 1st to the 20th of this month. In fact, the increase in crude oil and gas imports rose by 57.8% and 114.3%, respectively, compared to last year. As of the 20th of this month, the cumulative trade deficit for this year stands at 5.977 billion dollars.

When Will Price Stability Come?
(Seoul=Yonhap News) Reporter Ryu Young-seok = Amid ongoing price increases, citizens are shopping at a food section in a Seoul supermarket on the 24th.
The Bank of Korea presented a revised economic outlook on the day, projecting this year's consumer price inflation rate at 3.1%. It is the first time since April 2012, when the Bank forecasted a 3.2% inflation rate, that the central bank has projected a consumer price inflation rate in the 3% range for the current year. February 24, 2022.
ondol@yna.co.kr
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The Bank of Korea will announce the results of the "March Consumer Sentiment Survey" on the 29th. Last month, the Consumer Confidence Index was 103.1, down 1.3 points from the previous month. The Consumer Confidence Index is a comprehensive figure showing consumers' sentiment about the economic situation. If it is above the baseline of 100, consumer sentiment is considered more optimistic than the long-term average. If it is below 100, it means consumer sentiment is pessimistic.

The Consumer Confidence Index is expected to continue its downward trend this month as well. It is analyzed that consumer sentiment has likely been dampened due to the prolonged impact of COVID-19 combined with the Ukraine crisis. In December last year, the Consumer Confidence Index fell by 3.8 points from the previous month as COVID-19 cases surged.

The Bank of Korea will also announce the "March Business Survey Index" on the 31st. Last month, the overall industry BSI was 85, down 1 point from the previous month, marking a decline for two consecutive months. Attention is focused on whether the BSI will continue to decline for three consecutive months this month, as the number of COVID-19 cases this month has significantly exceeded last month’s cases.

The Statistics Korea will announce the "February Industrial Activity Trends" on the 31st. This is attracting attention as it will help understand the impact of the spread of the COVID-19 Omicron variant on the real economy. In January this year, industrial production and consumption both decreased for the first time in 1 year and 10 months.

Additionally, the government will finalize the "Detailed Guidelines for Budget Formulation and Fund Operation Plan for Next Year" at the Cabinet meeting on the 29th. Through these detailed guidelines, the government will provide direction to each ministry regarding next year’s budget and fund operation plans. This also means that the budget formulation process for next year has officially begun.

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