Trade Deficit Enters Fourth Consecutive Month of Losses

South Korea's trade balance has recorded a deficit for four consecutive months for the first time in 14 years since the global financial crisis in 2008. The accumulated trade deficit up to July this year reached $15 billion, already surpassing the annual deficit scale of 2008. The sharp rise in energy prices significantly increased imports, while the slowdown in China's growth led to a decrease in exports to China, which had a major impact.

According to the Ministry of Trade, Industry and Energy's "July Export-Import Trends" released on the 1st, the trade balance recorded a deficit of $4.67 billion last month. Imports last month were $65.37 billion, up 21.8% compared to the same period last year, while exports increased by only 9.4% to $60.7 billion. The trade balance recording a deficit for four consecutive months is the first time since June to September 2008 during the global financial crisis. ▷Related article on page 3

The cumulative trade deficit this year is $15.025 billion, exceeding the annual deficit of $13.27 billion in 2008. The trade balance showed a surplus in February and March this year but turned to a deficit from April ($2.48 billion), increasing the deficit in May ($1.61 billion) and June ($2.57 billion). If this situation continues in the second half of the year, there is a possibility of surpassing the record largest trade deficit of $20.62 billion in 1996.

The four-month consecutive "deficit streak" in the trade balance is due to soaring energy prices, which also increased import amounts. The impact of China's lockdown, South Korea's largest export market, is also cited as a major cause of the trade deficit. Exports to China this month decreased by 2.5% compared to the same period last year, recording a trade deficit of $580 million.

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