March Trade Deficit of $4.6 Billion... Semiconductor Exports Plunge 34.5% (Update)

Due to the global economic slowdown and worsening exports, South Korea's trade balance has continued to run a deficit for 13 consecutive months.

According to the Ministry of Trade, Industry and Energy on the 1st, South Korea's March export value (provisional customs clearance basis) was $55.12 billion, down 13.6% compared to the same period last year, and imports were $59.7 billion, down 6.4%, respectively. As a result, the trade balance recorded a deficit of $4.62 billion.

During this period, the number of working days was 24, one day more than the same period last year (23 days). Considering the number of working days, the average daily export value was $2.3 billion, down 17.2%.

On the 8th, when the government issued an additional work commencement order to the Cargo Solidarity Union, containers were piled up at the Uiwang IDC in Gyeonggi Province.
Uiwang - Photo by Kang Jin-hyung aymsdream@

Exports have declined for six consecutive months since October last year, but fortunately, the export scale recovered to the $55 billion level for the first time in six months since September last year ($57.2 billion). The Ministry of Trade, Industry and Energy analyzed, "Exports decreased due to the global economic slowdown, semiconductor industry downturn, and the base effect from the record-high export performance in March last year ($63.8 billion), but the trade deficit has shown a gradually improving trend since January this year."

The cumulative annual export value this year was $151.62 billion, down 12.6% compared to the same period last year, and imports were $174.021 billion, down 2.2%, respectively. As a result, the annual trade balance recorded a deficit of $22.41 billion. The trade deficit has continued for 13 consecutive months from March last year to last month.

By item, exports of vehicle-related products such as automobiles (64.2%) and secondary batteries (1.0%) increased, but exports of IT items such as semiconductors (-34.5%) and displays (-41.6%), as well as intermediate goods such as petrochemicals (-25.1%) and steel (-10.7%), decreased. In particular, semiconductors, the largest export item, saw exports decline for eight consecutive months compared to the same period last year due to factors such as falling product prices. By region, exports increased to the United States (1.6%) and the Middle East (21.6%), but exports to China (-33.4%) and ASEAN (-21.0%) decreased.

During the same period, imports of energy such as crude oil (-6.1%) and gas (-25.0%) decreased by 11.1%, leading to an overall decline in import volume. In addition to energy, imports of raw and subsidiary materials such as semiconductors and steel also continued to decline.

The government stated, "To improve the trade deficit, we will concentrate export support budgets in the first half of the year and promote the export commercialization of small and medium-sized enterprises and mid-sized companies," adding, "We will strengthen support such as discovering promising items so that the cooperative atmosphere between Korea and Japan leads to export expansion."