Exports up 9.4 pct in July; trade deficit extended for 4th month

August 1, 2022

 South Korea suffered a trade deficit for the fourth consecutive month in July over high global energy prices, though its exports rose 9.4 percent on-year on solid demand for chips, data showed Monday.

Outbound shipments stood at US$60.7 billion last month, up from $55.5 billion a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.

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

July also marked the 21st consecutive month that the country’s exports have logged an on-year expansion.

But the country posted a trade deficit of $4.67 billion last month, as imports jumped 21.8 percent on-year to reach an all-time monthly high of $65.37 billion, on soaring global energy prices.

Dubai crude, South Korea’s benchmark, rose to $103.14 per barrel in July on average from $72.93 a year earlier.

South Korea depends on imports for most of its energy needs, and the country’s energy imports surged 90.5 percent on-year to $18.5 billion in July, according to the ministry.

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

The deficit had grown from $1.61 billion in May and $2.57 billion in June. The figure for April came to $2.48 billion.

In this file photo, containers for exports and imports are stacked at a pier in South Korea's southern port city of Busan on July 1, 2022. (Yonhap)

In this file photo, containers for exports and imports are stacked at a pier in South Korea’s southern port city of Busan on July 1, 2022. (Yonhap)

Solid overseas demand for the country’s key exports items led the overall export growth in July.

Sales of semiconductors went up 2.1 percent on-year to $11.21 billion last month, the highest figure for any July.

Outbound shipments of petroleum products surged 86.5 percent to a record monthly high of $6.72 billion, and those of vehicles rose 25.3 percent to $5.14 billion, also the highest ever.

Sales of steel products rose 5.2 percent to $3.31 billion, and demand for vessels advanced 29.2 percent to $2.55 billion, the data showed.

Rechargeable batteries also enjoyed the largest monthly sales of $880 million by going up 11.8 percent on-year, the ministry said.

But sales of computers tumbled 27.3 percent, and exports of bio products fell 12.1 percent on-year in July. Those of home appliances also decreased 18.7 percent.

By nation, exports to the United States grew 14.6 percent to reach an all-time high of $10 billion last month. Shipments to ASEAN jumped 20.9 percent to $11.65 billion, and those to the European Union went up 14.6 percent to $6.1 billion.

Sales in India spiked 92.4 percent, and those in the Middle Eastern nations also rose 11.7 percent.

Shipments to China, however, went down 2.5 percent to $13.24 billion amid its economic slowdown, and exports bound for the Commonwealth of Independent States fell 5.7 percent to $1.06 billion in July over the ongoing conflict surrounding Ukraine, the ministry said.

“The government has taken the current economic situation seriously. We will announce comprehensive measures this month to promote exports by revising regulatory policies and seeking tailor-made support,” Industry Minister Lee Chang-yang said.