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Country records first-ever trade deficit in 11 years
07 Jul '08
2 min read
South Korea has ended up with its first ever trade deficit in 11 years, while that with Japan is expected to hit a record high by the end of this year.
Trade deficit with Japan stood at US $16.4 billion as of June 20, up by 9.4 percent compared to the previous year. Apart from the rise in price of oil and essential raw material, increased imports of core machinery from Japan has also played a significant role in the widening trade imbalance between the two countries.
It is believed that if this trend of unequal trade continues, South Korea is likely to exceed the mark of $30 billion in deficit for the first time. Besides, trade with the US also went down for the fourth successive year registering $2.84 billion and a drop of 38.3 percent over last year.
On one hand, exports of petroleum products and textile goods among others fell drastically, while on the other import of machineries continued to escalate.
To make matters worse, trade with Middle East also led to enlarging shortfalls because rise in oil prices increased the deficit which amounted to $36.5 billion as of June 20, surpassing that of three quarters of 2007.
Revenues from EU also dipped by 6.3 percent, to touch $9.1 billion. Nonetheless, it is observed that exports to the region dropped because of an economic slowdown in the region which eroded the profits derived from the eastern part of the continent.
However, those from China brought some relief as trade surplus retrieved its momentum at $8.5 billion, up by 7 percent from 2007.
Government is hopeful that trade balance of South Korea would improve in the second half of the year to record a surplus of around $3.8 billion largely because of remarkable growth of the third world countries, China and some Latin American countries. But the annual outcome may still depict a deficit of about $1.9 billion against the predicted surplus of $13 billion.
Trade deficit with Japan stood at US $16.4 billion as of June 20, up by 9.4 percent compared to the previous year. Apart from the rise in price of oil and essential raw material, increased imports of core machinery from Japan has also played a significant role in the widening trade imbalance between the two countries.
It is believed that if this trend of unequal trade continues, South Korea is likely to exceed the mark of $30 billion in deficit for the first time. Besides, trade with the US also went down for the fourth successive year registering $2.84 billion and a drop of 38.3 percent over last year.
On one hand, exports of petroleum products and textile goods among others fell drastically, while on the other import of machineries continued to escalate.
To make matters worse, trade with Middle East also led to enlarging shortfalls because rise in oil prices increased the deficit which amounted to $36.5 billion as of June 20, surpassing that of three quarters of 2007.
Revenues from EU also dipped by 6.3 percent, to touch $9.1 billion. Nonetheless, it is observed that exports to the region dropped because of an economic slowdown in the region which eroded the profits derived from the eastern part of the continent.
However, those from China brought some relief as trade surplus retrieved its momentum at $8.5 billion, up by 7 percent from 2007.
Government is hopeful that trade balance of South Korea would improve in the second half of the year to record a surplus of around $3.8 billion largely because of remarkable growth of the third world countries, China and some Latin American countries. But the annual outcome may still depict a deficit of about $1.9 billion against the predicted surplus of $13 billion.
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