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(2nd LD) S. Korea's exports down for first time in 2 years; trade deficit extended

All News 11:30 November 01, 2022

(ATTN: ADDS details in 4th para, emergency meeting in last 3 paras; RECASTS headline to highlight more info)
By Oh Seok-min

SEOUL, Nov. 1 (Yonhap) -- South Korea's exports logged an on-year decline in October for the first time in two years on sluggish global demand amid high inflation and an economic slowdown, the trade ministry said Tuesday.

The country also suffered a trade deficit for the seventh consecutive month as imports grew on high global energy prices, sparking concerns over its growth momentum.

Outbound shipments stood at US$52.48 billion last month, down 5.7 percent from $55.7 billion a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.

It was the first on-year decline since the 3.6 percent drop posted in October 2020.

The country's imports grew 9.9 percent on-year to $59.18 billion in October on high global energy prices, resulting in a trade deficit of $6.7 billion.

Imports have exceeded exports in South Korea since April, and it is the first time since 1997 that the country has suffered a trade deficit for seven months in a row.

South Korea depends on imports for most of its energy needs, and the country's energy imports surged 42.1 percent on-year to $15.53 billion in October, the ministry said.

"The fall in exports came amid the prolonged war between Russia and Ukraine, and the global economic slowdown over monetary tightening by major nations," the ministry said in a release.

The dwindling demand in China and the decrease in semiconductor prices, as well as a high-base effect, also led to the fall in exports, it added.

This file photo taken Oct. 21, 2022, shows stacks of containers at a port in South Korea's southeastern city of Busan. (Yonhap)

This file photo taken Oct. 21, 2022, shows stacks of containers at a port in South Korea's southeastern city of Busan. (Yonhap)

By item, overseas sales of semiconductors -- a key export item that accounts for about 20 percent of South Korea's exports -- slid 17.4 percent on-year to $9.23 billion on falling demand and a fall in chip prices, according to the ministry.

The chip exports have logged an on-year decline since August.

Sales of petrochemicals went down 25.5 percent to $3.73 billion, and exports of steel products also decreased 20.8 percent to $2.67 billion last month.

But car exports jumped 28.5 percent to $4.92 billion, an all-time high for any October, and sales of petroleum products increased 7.6 percent to $4.39 billion.

The shipment of secondary batteries rose 16.7 percent to $800 million last month, also a record figure for any October, the data showed.

By nation, exports to China, South Korea's No. 1 trading partner, fell 15.7 percent to $12.16 billion last month, and shipments to the Association of Southeast Asian Nations (ASEAN) went down 5.8 percent to $9.22 billion in October.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam.

But sales in the United States rose 6.6 percent to $8.6 billion, and those in the European Union jumped 10.3 percent to $5.62 billion, the data showed.

Exports bound for the Commonwealth of Independent States inched up 0.4 percent to $1.14 billion in October due to low base effects.

"We take the current trade situation very seriously. We will mobilize every possible means to revive exports momentum," Industry Minister Lee Chang-yang said.

Also Tuesday, Trade Minister Ahn Duk-geun held an emergency meeting on exports with major exporters and related associations to discuss measures to revive momentum and to improve the trade balance.

South Korea is expected to face even more difficult circumstances, Ahn said as he renewed the government's commitment to easing regulations, nurturing new industries and extending necessary support to buttress exports.

The participating firms called for the government's active responses to global risk factors in key industries amid intensifying global competitions and tailored supportive measures, according to the ministry.


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