Trade Deficit of $7.6 Billion from June 1-20... Export Also Shows Unusual Signs (Update)

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Dongwoo Lee] Amid growing concerns over a global economic recession due to rapid worldwide inflation, abnormal signals are also being detected in domestic exports. Exports of major domestic items such as passenger cars and auto parts decreased by 3.4% compared to the same period last year from the beginning of this month to the 20th.

According to the Korea Customs Service on the 21st, the export amount (provisional clearance basis) from the 1st to the 20th of this month was $31.283 billion, down 3.4% from the same period last year. This is the first time in about four months since February 1-10 of this year, which included the Lunar New Year holiday, that exports have decreased compared to the previous year.

The number of working days during this period was 13.5 days, two days fewer than the same period last year (15.5 days). However, the average daily export amount increased by 11.0% when this was taken into account.

Among major export items, semiconductors (1.9%) and petroleum products (88.3%) increased, while passenger cars (-23.5%), auto parts (-14.7%), and wireless communication devices (-23.5%) decreased.

Exports to Taiwan (16.5%) and Singapore (54.9%) increased during the same period, but exports to major countries such as China (-6.8%), the United States (-2.1%), the European Union (-5.3%), and Vietnam (-4.7%) decreased due to worsening external trade conditions, including China's lockdown measures.

Imports from the 1st to the 20th of this month amounted to $38.9 billion, up 21.1% from a year earlier.

Imports of crude oil (63.8%), semiconductors (40.2%), and petroleum products (24.5%) increased, but imports of semiconductor manufacturing equipment (-6.5%) and passenger cars (-34.8%) decreased. By country, imports from China (23.4%), the United States (13.3%), and Japan (1.9%) increased, while imports from the EU (-3.3%) and Russia (-44.1%) decreased.

The sharp increase in total imports is due to the prolonged Ukraine crisis, which caused energy prices to surge. In particular, the combined import amount of the three major energy sources?crude oil ($6.06 billion), coal ($1.698 billion), and gas ($1.557 billion)?was $9.261 billion, soaring 67.5% compared to the same period last year ($5.528 billion). Coal imports set a record high last month.

During this period, as exports decreased and imports increased, the trade deficit was recorded at $7.642 billion. The cumulative trade deficit this year also reached $15.469 billion. If this situation continues, there is a high possibility that the overall trade balance for June will also record a deficit. If the June trade balance records a deficit, it will be the third consecutive month of deficits this year.

The problem is that the trade deficit trend may continue in the second half of this year as well. This is due to soaring grain prices caused by global inflation-driven economic recession and international food protectionism resulting from the prolonged Russia-Ukraine war.

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