The Central Bank Says
The Bank of Korea said in its report on Sept. 6 that South Korea’s trade deficit attributable to rising energy prices is likely to continue for a while, with the current global economic slowdown adversely affecting its exports.
“From January to August this year, South Korea’s trade balance decreased by US$45.4 billion year on year with the export and import unit price factors causing a decrease of US$47.2 billion and the volume factor causing an increase of US$1.8 billion,” it said, adding, “Rising import unit costs decreased the balance by US$76.8 billion while rising export unit costs increased the balance by US$39.5 billion.”
In that period, the unit cost factors of energy sources such as crude oil, gas and coal and petroleum products such as oil refining products decreased the balance by US$35.3 billion, 78 percent of the overall trade balance decrease. According to the bank, the trade balance was also affected by the sluggish exports of some major items, including mobile phones, displays, ships and cars, an increase in overseas production in the automobile, semiconductor and smartphone industries and an increase in intermediate goods imports.
The bank also said that South Korea is likely to show a current account surplus this year despite the trade deficit and this has to do with an increase in customs-free exports, a primary income surplus, etc.