Korea's Trade Deficit Swells to 66-Year High

  • By Jo Jae-hee

    September 02, 2022 12:20

    Korea's trade deficit reached a record US$9.5 billion in August due to soaring energy import costs and slowing export growth.
    Outbound shipments of semiconductors, Korea's top export item, started declining for the first time in 26 months. The trade deficit could widen further as energy imports rise when the weather gets colder.
    The Ministry of Trade, Industry and Energy said Thursday that Korea's exports increased 6.6 percent on-year in August to $56.6 billion, while imports surged 28.2 percent to $66.2 billion, resulting in a trade deficit of $9.5 billion.
    That is almost twice as high as the previous monthly record deficit of $4.9 billion in January. Korea also suffered five straight months of trade deficit for the first time in 14 years. As a result, the cumulative trade deficit totaled $24.7 billion until August, already outstripping the record annual trade deficit of $20.6 billion of 1996.
    As the global energy crisis worsens, the cost of importing crude oil, gas and coal surged, while imports of automotive semiconductors also rose 26.1 percent on-year. Imports of lithium hydroxide and other raw materials for electric vehicle batteries also grew sharply.
    Exports of petroleum products, cars, steel and rechargeable batteries remained strong, continuing to grow for the 22nd month, but only in the single digits. Exports of computer chips actually fell 7.8 percent, shifting to a decline for the first time in 26 months, while petrochemical exports dropped 11.7 percent, down for the third straight month.
    Shipments to China, Korea's biggest trading partner, fell 5.4 percent, leading to a fourth month of deficits.
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