Finance Minister Choo Kyung-ho said Wednesday that South Korea recorded a trade deficit last month due to higher energy imports, but its trade performance is anticipated to gradually improve down the road on the back of China's reopening.
The remark came after the export-reliant economy suffered the largest-ever monthly trade deficit in January, with outbound shipments logging an on-year decline for the fourth consecutive month.
"The increased trade deficit in January was blamed on seasonal factors, including the increased energy imports," Choo said during a meeting with ministry officials working at overseas embassies.
"The sharp decline in chip prices and disruptions in China's economic activities amid the COVID-19 pandemic further deteriorated the trade balance," Choo added, pointing out that it showed that the country's economy is still "in a severe cold."
Outbound shipments fell 16.6 percent on-year to come to $46.27 billion in January, following a 9.5 percent on-year fall the previous month, according to the data compiled by the Ministry of Trade, Industry and Energy.
Choo, however, said South Korea's exports are anticipated to improve gradually down the road when the seasonal factors fade out, with the impact of China's reopening also giving a positive impact to Asia's No. 4 economy.
China is the biggest trading partner for South Korea.
The finance minister added South Korea will spare no efforts to support exporters and plans to roll out various programs to prop up exports of emerging sectors, such as defense, nuclear energy, and infrastructure.
The finance ministry will also make efforts to promptly pass bills on offering tax cuts for chipmakers at the parliament this year, Choo added.
Last month, the government said it plans to apply a higher tax credit rate of 15 percent on facility investment in the chip industry for conglomerates, higher than the recently passed revision of 8 percent. (Yonhap)