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(2nd LD) Exports up 6.6 pct in August; trade deficit hits all-time high

All News 11:05 September 01, 2022

(ATTN: ADDS minister's comments, background info in last 3 paras, byline)
By Oh Seok-min

SEOUL, Sept. 1 (Yonhap) -- South Korea suffered a record high monthly trade deficit in August on high global energy prices, though its exports rose 6.6 percent on-year, data showed Thursday.

Outbound shipments stood at US$56.67 billion last month, up from $53.2 billion a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.

It is the highest tally for any August since the ministry began compiling related data in 1956. The previous record was set a year earlier.

August also marked the 22nd consecutive month that the country's exports have logged an on-year expansion.

But the country posted a trade deficit of $9.47 billion last month, the largest amount to date, as imports jumped 28.2 percent on-year to $66.15 billion on soaring global energy prices.

Imports have exceeded exports in South Korea since April, and it is the first time since 2008 that the country has suffered a trade deficit for five months in a row.

The deficit has grown from $1.6 billion in May to $2.49 billion in June and further to $4.8 billion. The figure for April came to $2.48 billion, according to government data.

South Korea depends on imports for most of its energy needs, and the country's energy imports surged 91.8 percent on-year to $18.52 billion in August, the ministry said.

Dubai crude, South Korea's benchmark, rose to $96.63 per barrel in August on average from $69.50 a year earlier.

This file photo, taken Aug. 22, 2022, shows containers stacked at a pier in South Korea's southeastern port city of Busan. (Yonhap)

This file photo, taken Aug. 22, 2022, shows containers stacked at a pier in South Korea's southeastern port city of Busan. (Yonhap)

The growth in exports had slowed down in recent months, as they began to mark a single-digit growth in June following a 15-month-long double-digit increase.

Overseas sales of semiconductors, a key export item, fell 7.8 percent on-year to $10.78 billion on dwindling demand and a fall in prices amid a global economic slowdown, according to the ministry.

It was the first on-year decline in 26 months. Semiconductors accounted for about 20 percent of South Korea's exports.

But exports of petroleum products soared 113.6 percent to $6.57 billion, and those of vehicles rose 35.9 percent to $4.12 billion. Sales of steel products also increased 2.8 percent to $3.24 billion.

Rechargeable batteries enjoyed the largest monthly sales of $940 million by advancing 35.7 percent on-year, the ministry said.

By nation, exports to China marked a 5.4 percent on-year fall to $13.13 billion amid its economic slowdown. China is South Korea's No. 1 trading partner.

Shipments to the United States, however, climbed 13.7 percent to $8.76 billion and those to ASEAN soared 21.7 percent to $10.86 billion.

Exports to the European Union went up 7.3 percent to $5.4 billion, and sales to India and the Middle East jumped 27.1 percent and 7.8 percent, respectively.

Exports bound for the Commonwealth of Independent States shed 10.6 percent to $860 million in August over the prolonged Russia-Ukraine war, the ministry said.

"Despite the record-high exports for any August last month, we are facing multiple risk factors," Industry Minister Lee Chang-yang said. "We take the recent situation regarding the trade deficit seriously and will extend all-out efforts to prop up exports and improve the trade balance."

On Wednesday, the government announced a set of measures to boost exports.

The measures include providing up to a record 351 trillion won (US$260 billion) in trade financing to local exporters, nurturing such future industries as bio and battery sectors and expediting large-scale export projects in nuclear power and defense fields.


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