According to The Korea Herald article published on December 13, 2022, South Korea is widely expected to post a record trade deficit this year due to soaring international energy prices amid a slowdown in exports, sources said Tuesday.
Asia's fourth-largest economy had a trade deficit of $47.46 billion as of Saturday this year, the largest-ever yearly red ink, according to the Korea Customs Service.
The figure is nearly 2.3 times the previous all-time high of $20.62 billion recorded in 1996.
It is also well above forecasts made by major economic think tanks, including the Korea International Trade Association, which projected a full-year red ink of $45 billion.
Given the current trend, South Korea is sure to register a full-year trade deficit for the first time since 2008, when the country was $13.27 billion in the red in the wake of the global financial crisis, according to analysts.
Some watchers predicted South Korea's trade deficit to exceed $50 billion for all of this year.
South Korea's record trade deficit comes amid high international oil and other raw material prices, stemming from the protracted war in Ukraine.
The country's imports of crude oil, gas and coal spiked 72.7 percent on-year to $180.4 billion this year. South Korea depends on imports for most of its energy needs.
South Korea's dwindling exports also contributed to its surging trade deficit.
Overseas shipments fell for the second consecutive month in November due mainly to sluggish demand for semiconductors amid a global economic slowdown.
The country's exports sank 14 percent on-year to $51.91 billion last month, following a 5.7 percent on-year decline the previous month.
Local thinks tanks paint a bleak view of South Korea's trade balance in the coming year.
KITA expects the country's trade deficit to reach $13.8 billion in 2023, with the Korea Institute for Industrial Economics & Trade forecasting a red ink of $26.6 billion.
"South Korea's export conditions are unlikely to improve much next year as global demand is feared to weaken further due to high interest rates and other negatives," said professor Cheong In-kyo of Inha University in Incheon, 27 kilometers west of Seoul. "Semiconductor exports are expected not to take a turn for the better, with shipments to China likely to weaken."
