Economic Chief: "No Possibility of Twin Deficits"

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Hyun-seok] Choi Sang-mok, Senior Secretary for Economic Affairs at the Presidential Office, stated on the 4th, "There is no possibility of a twin deficit (fiscal + current account)."

At a briefing that day, Senior Secretary Choi said, "Despite the trade deficit, a current account surplus is expected."

The trade deficit in July recorded $4.67 billion. This marks the fourth consecutive month of deficit since April, with the deficit widening compared to the previous month.

Regarding the background of the trade deficit, he explained, "It is not due to sluggish exports but because of rising energy prices," noting that exports increased by $5.2 billion compared to the same month last year, ranking first ever for July.

Senior Secretary Choi said, "It is difficult to say that exports are sluggish," and added, "Worsening trade balances are common among countries with high energy dependence."

He also mentioned that Japan has recorded a trade deficit for 11 consecutive months, and Germany recorded a trade deficit for the first time in 31 years since 1991.

He said the current account balance directly affects foreign currency supply and demand, forecasting "an annual surplus of $30 to $40 billion."

Senior Secretary Choi noted that the fiscal balance has been in deficit for four consecutive years from 2019 to this year, saying, "The government's biggest task is to make efforts to reduce this to a sustainable level as much as possible."

While signs of price stabilization are observed in items like fuel and pork due to inflation measures, he said, "The forecast that inflation will peak around October is largely on track."

He also mentioned that the Emergency Economic and Livelihood Meeting in August plans to discuss Chuseok livelihood measures.

Regarding the 'Chip4 (semiconductor supply chain alliance)' that the U.S. is requesting to join, he emphasized, "Nothing has been decided yet," adding, "Decisions will be made in a way that aligns with national interests through industry opinions, various circumstances, and government department discussions."

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