Trade Deficit Hits US$3.5 Bil. for First 20 Days of April
The Ministry of Economy and Finance announced on April 29 that South Korea's trade deficit totaled US$3.5 billion for the first 20 days of this month. During the period, the country's exports and imports added up to US$21.7 billion and US$25.2 billion, respectively. According to the ministry, South Korea is likely to post its first monthly trade deficit since January 2012 this month.
From April 1 to 20 this year, South Korea's exports dropped no less than 26.9 percent from a year ago. Specifically, semiconductor exports showed a year-on-year decline of 14.9 percent and petroleum product exports dropped by 53.5 percent with the international oil price plummeting to about US$10 per barrel. Besides, auto parts and automobile exports dropped 49.8 percent and 28.5 percent, respectively. By export destination, South Korea's exports to China, the United States, the European Union and Vietnam fell 17 percent, 17.5 percent, 32.6 percent and 39.5 percent, respectively.
This can lead to a decline in the capabilities of local manufacturers heavily dependent on exports. Furthermore, the trade deficit is a serious matter in that it can cause a current account deficit. South Korea posted a current account surplus of US$6.4 billion in February this year, and yet another current account surplus cannot be guaranteed if sluggish exports continue.