Energy Demand in Winter... "Trade Deficit to Widen Further in Q4"

Ministry of Industry Holds 'Export Situation Review Meeting'

Trade Deficit of 4.1 Billion Dollars from September 1 to 20
(Busan=Yonhap News) Reporter Kang Deok-cheol = On the afternoon of the 21st, container handling operations are underway at Busan Port's Sinsundae and Gamman Pier. Since the beginning of September until the 20th, exports decreased compared to the same period last year, while imports increased, raising the likelihood that the trade deficit will continue for six consecutive months for the first time in 25 years. According to the Korea Customs Service on the 21st, the export value (provisional customs clearance basis) from the 1st to the 20th of this month was 32.958 billion dollars, down 8.7% from the same period last year. During the same period, imports amounted to 37.1 billion dollars, up 6.1%. 2022.9.21
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[Asia Economy Sejong=Reporter Lee Jun-hyung] An analysis has emerged that the trade deficit in the fourth quarter could widen further due to increased energy demand in winter. The government plans to swiftly implement export measures announced last month to improve the trade balance.

The Ministry of Trade, Industry and Energy announced that on the 22nd, Vice Minister Jang Young-jin presided over an "Export Situation Review Meeting" held at the Korea Importers Association in Seocho-gu, Seoul. Research institutions such as the Korea Institute for Industrial Economics and Trade and the Korea Institute for International Economic Policy, as well as related organizations including KOTRA and the Korea Trade Insurance Corporation, attended the meeting. Vice Minister Jang and the attendees reviewed the impact of changes in trade conditions on exports and imports and discussed government policy directions to improve the trade balance. Vice Minister Jang stated, "Export conditions are challenging due to major countries' interest rate hikes, regional lockdowns in China, and the decline in prices of key export items such as semiconductors. The government will do its utmost to revitalize exports and improve the trade balance under a serious awareness of the situation."

Research institutions predicted that the trade deficit will continue until the end of this year. This is due to the ongoing surge in international energy prices and the gradual expansion of energy imports driven by winter heating demand. The trade balance has already recorded a deficit for five consecutive months from April to last month, and from the 1st to the 20th of this month, it was recorded as a deficit of 4.15 billion dollars.

Specifically, the Korea Institute for Industrial Economics and Trade analyzed that "the recently surged imports will not decrease in the short term." The Hyundai Research Institute stated, "Difficult conditions such as economic downturns in major countries, high interest rates, and high exchange rates will continue for the time being," adding, "(However) next year, imports are expected to shift to a declining trend due to falling international oil and raw material prices." KOTRA commented, "Due to the expansion of global uncertainties and the impact of economic slowdown, conditions in the second half of this year are also expected to be challenging."

Vice Minister Jang Young-jin briefing on steel flood recovery and supply inspection TF
(Sejong=Yonhap News) Reporter Kim Joo-hyung = On the morning of the 14th, Jang Young-jin, Vice Minister of the Ministry of Trade, Industry and Energy, is briefing at the Government Complex Sejong in Sejong City on the operation plan of the steel flood recovery and supply inspection TF and the joint public-private steel supply survey team. 2022.9.14
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The Ministry of Trade, Industry and Energy expressed its commitment to making every effort to prevent chronic trade deficits. The ministry plans to increase trade finance supply to 351 trillion won, raising the trade insurance contract limit from the existing 230 trillion won to 260 trillion won, thus increasing trade finance by 90 trillion won beyond the original plan. Vice Minister Jang said, "The export growth rate has been in single digits since June due to decreased exports to China, our largest export market, and the decline in semiconductor unit prices," adding, "We are closely monitoring related trends with vigilance." He continued, "The government plans to swiftly implement the 'Export Competitiveness Enhancement Strategy' announced on the 31st of last month to revitalize exports," and added, "We will also work closely with the industry to overcome various regulations that cause bottlenecks in our exports."

Vice Minister Jang also emphasized the necessity of public-private cooperation. He said, "Accurate diagnosis and forecasting of the situation are essential for effective policy implementation," and requested, "Please actively participate in public-private cooperation channels for export situation reviews in the future and provide your opinions."