Trade Deficit of $3.52 Billion from April 1-10... Energy Imports Surge Due to High Oil Prices

Gas imports up 141.6%, petroleum products up 71.6%
"Supply chain recovery expected in the second half"

The trade balance is likely to record a deficit for the second consecutive month as raw material prices have surged sharply due to supply chain shocks.

According to the Korea Customs Service on the 11th, the trade deficit from the 1st to the 10th of this month was $3.519 billion. This deficit nearly doubled compared to the same period last year (-$1.814 billion). The prolonged Ukraine crisis has led to a sharp rise in international energy prices due to high oil prices. During this period, imports increased by 12.8% compared to the same period last year, reaching $18.854 billion. In particular, the import shares of gas (141.6%), petroleum products (71.6%), and crude oil (43.0%) increased significantly. The rising import price pressure caused by high oil prices is ultimately leading to a deterioration in trade terms.

According to the April issue of the Korea Development Institute (KDI) Economic Trends report, the Ukraine crisis and economic sanctions against Russia have caused external phenomena such as a sharp rise in raw material prices, instability in international financial markets, and a decline in global manufacturing sentiment. The price of oil (Dubai crude) doubled from the $60 per barrel range in March last year to over $120 last month. Although it has since shown a downward trend, it still remains around $100. If the surge in raw material prices due to supply chain instability continues long-term, the trade deficit trend may persist for the time being.

During the same period, exports were driven by strong performances in semiconductors and petroleum products, but exports of passenger cars and wireless communication devices declined, resulting in a 3% increase to $15.336 billion compared to $14.896 billion a year earlier. The number of working days during this period was 7, one day fewer than last year. Considering the number of working days, the average daily export value increased by 17.7%. Export items such as semiconductors (14.2%), petroleum products (97.0%), and computer peripherals (22.5%) increased compared to last year, while exports of passenger cars (-13.1%) and wireless communication devices (-10.3%) decreased.

Kang Sung-jin, a professor of economics at Korea University, said, "Considering the end of the Russia-Ukraine war and the COVID-19 situation, the recovery of the global supply chain is expected to be possible no earlier than the second half of this year."

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