Trade Deficit Surpasses $30 Billion for the First Time... Semiconductor Exports Also 'Wobble' (Comprehensive)

Cumulative Trade Deficit of $32.7 Billion
Semiconductor Exports Down 20.6% YoY
Prolonged Increase in Energy Import Costs

[Asia Economy Sejong=Reporter Dongwoo Lee] As the trade deficit continued until the 10th of this month, the cumulative trade deficit for this year exceeded $30 billion for the first time in history. The main factors were the decline in exports of key items such as semiconductors, which are the backbone of the Korean economy, due to the global economic slowdown, and the increase in energy import costs.

According to the Korea Customs Service on the 11th, the cumulative trade deficit from the beginning of this year until the 10th of this month reached $32.714 billion, the highest since trade statistics began in 1956. The trade deficit was $25.182 billion in August this year, surpassing the previous record deficit of $20.623 billion set in 1996, and increased by $5 billion in just two months.

Exports from the 1st to the 10th of this month amounted to $11.797 billion, down 20.2% compared to the same period last year, and imports during the same period also decreased by 11.3% to $15.622 billion. Although the number of working days was reduced by 0.5 days due to the National Foundation Day holiday (1st-3rd) and Hangul Day holiday (8th-10th), the fact that the average daily export value decreased by 12.2% compared to last year is a concerning indicator. If the total exports for this month decline, it will mark the first decrease in two years since October 2020.

In particular, exports of semiconductors, the main export item, fell sharply by 20.6% to $2.227 billion during the same period. Semiconductor exports have declined for two consecutive months until last month due to weakened demand caused by the global economic slowdown. Along with this, other major Korean export products such as steel products (down 36.1%), home appliances (down 29.9%), and petroleum products (down 21.3%) also fell by double digits. On the other hand, exports of ships (up 76.4%) and passenger cars (up 5.4%) increased.

Exports to major trading partners China (down 23.4%) and the United States (down 21.4%) also decreased. Exports to China have been declining for four consecutive months until last month. Exports to Vietnam (-11.9%), Japan (-35.5%), and Taiwan (-37.6%) also decreased. During this period, the trade deficit with China was $459 million, and the trade deficit with the U.S. was $102 million.

Meanwhile, due to the impact of rising energy prices, imports of crude oil (up 7.6%) and coal (up 10.4%) continued to increase, but the average daily import value decreased by 2.4% from the beginning of this month until the 10th. The import growth rate has exceeded the export growth rate for 16 consecutive months from June last year to last month. By major items, imports increased for crude oil, coal, wireless communication devices (up 39.1%), and semiconductor manufacturing equipment (up 19.8%). Conversely, imports decreased for gas (-16.1%), petroleum products (-14.3%), and machinery (-9.5%).

The combined import value of the three major energy sources?crude oil ($2.632 billion), gas ($1.021 billion), and coal ($487 million)?was $4.14 billion. This is a 0.9% increase compared to the same period last year ($4.15 billion). By importing countries, imports increased from China (3.9%) and Saudi Arabia (45.0%), while imports from the U.S. (-17.3%), the EU (-9.8%), and Japan (-16.0%) decreased.

This year, the trade balance recorded deficits for six consecutive months for the first time in 25 years since January 1995 to May 1997, with deficits of -$2.482 billion in April, -$1.593 billion in May, -$2.510 billion in June, -$5.077 billion in July, -$9.487 billion in August, and -$3.768 billion in September.

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