The Korea Herald


South Korea suffers trade deficit 2 months straight in 14 years

By Kim Byung-wook

Published : Feb. 1, 2022 - 16:01

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The port of Busan (Yonhap) The port of Busan (Yonhap)

South Korea witnessed a trade deficit for two consecutive months for the first time since the global financial crisis in 2008, due to rising prices of energy and raw materials.

According to the Ministry of Trade, Industry and Energy, Asia’s No. 4 economy saw its exports increase 15.2 percent on-year to $55.3 billion in February, while its imports surged 35.5 percent to $60.2 billion, resulting in a trade deficit of $4.8 billion.

This is the first two-month trade deficit since the four months in a row of deficit that were recorded from June to September 2008 amid the global financial crisis.

The spike in imports originated from rising prices of fossil fuels. The country imported $15.9 billion worth of crude oil, gas and coal, far greater than $9 billion last month.

“Japan, which shares a similar industrial structure with Korea, and France, which relies heavily on energy imports, suffered big losses,” an Industry Ministry official explained.

The rising prices of raw materials are showing no signs of abating for multiple reasons.

Amid a slowing of new investments into the oil industry, the global price of oil has gone up roughly 10 percent this year.

And global competition to secure natural gas stockpiles has grown as Russia threatens to invade Ukraine and cut off its natural gas supplies to Europe, driving the price of natural gas up more than 30 percent compared to earlier this year. The price of coal is going up as well, as Indonesia banned exports of coal due to power shortages.