Rising import costs spurred on by surging oil prices led to Korea's second consecutive trade deficit last month, with a shortfall soaring to U.S. $317 million, the Ministry of Commerce, Industry and Energy (MOCIE). According to the ministry's provisional estimate of trade activities based on customs records, the nation's exports in February totaled $13.55 billion, up 22.5 percent from the same month last year, while imports jumped 32.0 percent from a year ago to $13.82 billion.
The ministry noted three significant aspects concerning February's trade shortfall. The first is that February's shortfall of $317 million in trade was much larger than the $87 million deficit posted the month before in January. The second is that this is the first time Korea has posted two consecutive months of trade losses since October 1997 during the financial crisis. The third is that Korea's export volume, shortfalls notwithstanding, is ironically the nation's largest-ever outbound trade figure for February.
"The trailing trade account is a drastic change from the past few months," the ministry's press release said, which noted that Korea saw a relatively strong surplus of $1.26 billion in October, and $1.23 billion in November. But the trend, however, took a nosedive in January when the trade balance dipped into the red for the first time in 36 months.
Shipments of telecommunication equipment leapt 63.4 percent on-year to $1.35 billion, replacing semiconductor as the nation's top exporting product for the first time. Automobile exports rose 35.3 percent to $1.25 and semiconductor orders inched up mere 5.7 percent to $1.2 billion. On-year, shipments of general machinery grew by 12.6 percent from a year ago, household appliance rose 11 percent, petrochemicals increased 25.8 percent, steel orders expanded 15.8 percent), petroleum products surged 66.7 percent and textiles inched up 2.7 percent. Evidence of declining orders from a year ago were seen in computers, where demand dropped by 5.1 percent on-year, and in ships, which fell by 23.5 percent from a year ago.
The ministry forecast that while exports are likely to maintain double-digit growth rates, the nation may continue to post trade deficits as long as oil prices continue their climb. The ministry further said that Korea's trade shortfall is bound to worsen once a U.S.-Iraqi war gets underway. (Korea Herald)
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