Korea Suffers Trade Deficit for 4th Month Running

  • By Jo Jae-hee

    August 02, 2022 11:16

    Korea's trade deficit is rising every month, bringing the total so far this year to a record US$15 billion. July figures published Monday are the worst yet in a four-month run and alarming for export-dependent Korea. 
    The Ministry of Trade, Industry and Energy said Korea's exports in July increased 9.4 percent from a year ago to $60.7 billion, while imports surged 21.8 percent to $65.4 billion, resulting in a trade deficit of $4.67 billion. 
    The deficit stood at $2.47 billion in April, $1.71 billion in May, and $2.57 billion in June. 
    The last time Korea suffered four straight months of trade deficits was from June to September of 2008 at the height of the global financial crisis.
    At this rate, Korea's trade deficit this year could surpass the record $20.6 billion before the Asian financial crisis in 1996. 
    Korea's exports grew for the 21st month running in July, but a sharp increase in energy import prices led to an even higher trade deficit than the previous month. The price of Dubai crude oil has soared from $73 a barrel in July last year to $103, while liquefied natural gas prices surged 114 percent and coal prices 174 percent. Korea imported $18.5 billion worth of crude oil, gas and coal last month, almost twice as much in money terms as a year ago. 
    But exports to China, Korea's biggest trading partner, declined 2.5 percent to result in three straight months of deficits for the first time in 30 years. Coronavirus lockdowns of Chinese cities were partly to blame, but the fundamental reason is that Korean products have lost their appeal to consumers there. 
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