January Trade Deficit Hits $12.7 Billion... Largest Monthly Deficit on Record (Update)

[Asia Economy Sejong=Reporter Dongwoo Lee] Last month, the trade balance recorded a deficit of $12.69 billion, marking the largest monthly deficit ever. The trade balance has continued to show a deficit for 10 consecutive months from April last year to this month. The leading export item, semiconductors, decreased by about 45% compared to the same month last year, halving in volume.

According to the 'January Export-Import Trends' announced by the Ministry of Trade, Industry and Energy on the 1st, last month's exports amounted to $46.27 billion, down 16.6% from the same period last year, and imports were $58.96 billion, down 2.6%.

Accordingly, the trade balance recorded a deficit of $12.69 billion. The trade deficit is the largest on a monthly basis since August last year (-$9.435 billion).

[Image source=Yonhap News]

Exports were affected by global economic slowdown due to high inflation and high interest rates, as well as deterioration in the semiconductor industry. Exports of items such as ships (86.3%), automobiles (21.9%), and petroleum products (12.2%) increased, but items like semiconductors (-44.5%) and petrochemicals (-25.0%) sharply decreased.

In particular, the largest export item, semiconductors, is showing a growing trend of export decline due to falling prices of memory semiconductors such as DRAM and NAND flash. Semiconductor exports have been declining for six consecutive months since August last year.

Exports increased in regions such as the Middle East (4.0%) and the European Union (EU, 0.2%), but decreased in regions such as China (-31.4%) and ASEAN (-19.8%).

During the same period, imports decreased by 2.6% compared to the same period last year. Energy imports amounted to $15.8 billion, accounting for 26.8% of total imports, influencing the long-term trade deficit.

Last month, the trade balance recorded a deficit of $12.69 billion, continuing a 10-month consecutive deficit since April last year. This is the first time in about 25 years since January 1995 to May 1997 that the trade deficit has continued for 10 consecutive months. The trade deficit expanded to $6.72 billion in October and $7.04 billion in November last year, decreased to $4.69 billion in December, but more than doubled this year.