Trade Deficit of $10.2 Billion from August 1-20... Concerns Over 5 Consecutive Months of Deficit for the First Time in 14 Years (Summary)

Exports Up 3.9%·Imports Up 22.1%
Cumulative Trade Deficit $25.5 Billion
Annual Deficit Concern $30 Billion
Trade Deficit with China Continues for 4 Months

[Asia Economy Sejong=Reporter Dongwoo Lee] South Korea recorded a trade deficit exceeding 10 billion dollars from the beginning of this month to the 20th. This was due to exports increasing by about 4% compared to the same period last year, while imports rose by 22%.

According to the Korea Customs Service on the 22nd, the export amount (provisional customs clearance basis) from the 1st to the 20th of this month was 33.424 billion dollars, a 3.9% increase compared to the same period last year. The number of working days during this period was 15.5 days, 0.5 days more than last year. Considering the number of working days, the average daily export amount increased by 0.5%.

This year’s trade balance recorded deficits for four consecutive months: January (-4.95 billion dollars), April (-2.476 billion dollars), May (-1.6 billion dollars), June (-2.487 billion dollars), and July (-4.805 billion dollars). If the trade deficit continues for five consecutive months including this month, it will be the first time in over 14 years since December 2007 to April 2008.

By item, exports increased compared to a year ago in petroleum products (109.3%), passenger cars (22.0%), ships (15.4%), automobile parts (8.9%), and home appliances (15.0%). However, semiconductors, a major export item of Korea, decreased by 7.5%. Exports also declined in wireless communication devices (-24.6%), computer peripherals (-32.8%), precision instruments (-1.3%), and steel products (-0.5%). By trading partner, exports increased to the United States (0.8%), European Union (EU, 19.8%), Vietnam (2.2%), and Singapore (115.7%), while exports to China (-11.2%), Japan (-6.3%), and Hong Kong (-45.0%) decreased.

During the same period, imports amounted to 43.641 billion dollars, a 22.1% increase compared to the same period last year. The prolonged Russia-Ukraine war caused supply chain disruptions, leading to continued increases in energy imports such as crude oil (54.1%), gas (80.4%), and coal (143.4%). Imports of other major products such as semiconductors (24.1%), passenger cars (44.3%), machinery (5.7%), and wireless communication devices (15.0%) also increased, while imports of petroleum products (-1.6%) decreased. By country, imports increased from China (14.2%), the United States (18.8%), Saudi Arabia (99.2%), Vietnam (35.5%), and Taiwan (30.5%). Conversely, imports decreased from the European Union (-2.0%), Japan (-1.7%), and Russia (-39.2%).

As a result, the cumulative annual trade deficit reached 25.5 billion dollars, marking the largest deficit on record. At this rate, there is a possibility that this year’s trade deficit will surpass 30 billion dollars, exceeding the 20.6 billion dollar deficit recorded in 1996.

The trade balance with China from the 1st to the 20th of this month also recorded a deficit of 667 million dollars. The trade balance with China had recorded deficits for three consecutive months until last month. A four-month consecutive trade deficit with China has not occurred since the establishment of diplomatic relations between Korea and China in August 1992.

The continued trade deficit is attributed to the sharp rise in global energy prices caused by the prolonged Russia-Ukraine war. Additionally, the demand slowdown due to China’s COVID-19 lockdowns, Korea’s largest trading partner, also had a negative impact. China’s GDP growth in the second quarter of this year was only 0.4% compared to the same period last year.

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