Oil Shock Direct Hit... Trade Deficit Already $13.8 Billion (Update)

Exports up 12.7% from June 1-10... Imports rise 17.5%
Trade deficit $6 billion... Cumulative $13.8 billion this year
Energy price surge impact... Crude oil imports up 88% YoY
Major countries' exports also shrink... US, China, etc. all decline

April Current Account Deficit of 80 Million Dollars... Surplus Broken After 2 Years
(Busan=Yonhap News) Photo by Kang Deok-cheol = On the 10th, container unloading work is underway at the Busan Port Sinsundae Pier. According to the preliminary balance of payments statistics announced by the Bank of Korea on the 10th, the current account recorded a deficit of 80 million dollars (about 150 billion won) in April. The current account turned to a deficit for the first time in 24 months. 2022.6.10
kangdcc@yna.co.kr
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[Asia Economy Sejong=Reporter Lee Junhyung] The cumulative trade deficit this year has exceeded $13.8 billion, marking a faster pace than during the 2008 global financial crisis. Due to the impact of high oil prices, energy import costs are soaring, raising concerns that the trade deficit may become prolonged.

According to the Korea Customs Service on the 13th, the trade balance from the 1st to the 10th of this month recorded a deficit of $6 billion. Imports increased by 17.5% year-on-year to $21.1 billion, while exports rose by only 12.7% to $15.1 billion. Considering that the trade deficit during the same period last year was $670 million, the deficit has increased about ninefold in the past year.

The cumulative trade deficit this year totaled $13.8 billion. Specifically, exports reached $307.7 billion, up 15.8% from a year earlier, while imports rose 26.8% to $321.5 billion. During the same period last year, the trade balance showed a surplus of $12.3 billion. Even during the 2008 global financial crisis, the trade deficit exceeded $10 billion only after August.

The surge in the trade deficit to this scale is due to the sharp rise in energy prices. Since the Ukraine crisis, imports of the three major energy sources?crude oil (88.1%), coal (223.9%), and gas (10.1%)?have increased steeply. In particular, coal imports set a record high last month. Although major export items such as semiconductors (0.8%) and petroleum products (94.5%) have performed well, the trade balance has not escaped a deficit.

Exports to major countries are also shrinking due to worsening external trade conditions, such as China's lockdown measures. Exports to China and the United States decreased by 16.2% and 9.7%, respectively, compared to the same period last year. Exports to Vietnam (-8.3%), the European Union (-23.3%), and Japan (-17%) also declined simultaneously.

The problem is that the trade deficit trend is likely to continue in the second half of this year. The prolonged high oil price situation, with international oil prices surpassing $120, and soaring international grain prices due to food protectionism are contributing factors. Agricultural imports have exceeded $2 billion for three consecutive months recently. Accordingly, the Korea Institute for Industrial Economics & Trade (KIET) forecasted in its recently released 'Second Half Economic and Industrial Outlook' that this year's trade deficit will be around $16 billion.

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