Korea Posts 2nd Month of Trade Deficits

  • By Jo Jae-hee

    February 03, 2022 13:03

    Korea suffered a rare trade deficit in January of this year, remaining in the red for the second consecutive month. The last time the country suffered two straight months of trade deficits was during the 2008 global financial crisis.

    The outlook for exports remains cloudy because the U.S.' and China's economic forecasts appear dim.

    The Ministry of Trade, Industry and Energy said Wednesday that exports in January increased 15.2 percent on-year to US$55.3 billion, but imports jumped 35.5 percent to $60.2 billion, resulting in a $4.89 billion trade deficit. That was also the biggest monthly deficit since January 2018.

    The prime culprit was rising prices of imported crude oil, gas and coal when demand increased in winter. The $586 billion trade deficit Korea suffered in December was also due to surging energy prices.

    The rate of export growth is also weakening. Korea's exports increased 24.2 percent last October and peaked at 31.9 percent in November, only to slow to 18.3 percent in December and 15.2 percent last month.

    The economies of China, which accounted for 25.2 percent of Korea's exports last year, and the U.S., which accounted for 14.2 percent, are expected to remain sluggish due to global supply chain disruptions and rising consumer prices.

    Last month, the International Monetary Fund slashed Korea's economic growth forecast for this year from 4.9 percent to 4.4 percent. It also cut the U.S.' outlook from 5.2 percent to four percent and China's from 5.6 percent to 4.8 percent.

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