Trade budgets worsening due to export deterioration

Trade budgets are expected to deeply deteriorate this August as exports keep decreasing.

The Korea Development Institute (KDI) reported in its August 31 "weekly economy guide" that the trade deficit would mark 1 billion dollars in the red as of August 25, worsening by 600 million dollars from a 400 million dollar deficit during the same period last year. This was accounted for by continued export decreases, leaving exports standing at 8.4 billion dollars, a decline of 21.9% over the same period of last year. Imports, on the other hand, decreased by 15.7% to 9.4 billion dollars. Current expectations are that this month's trade balance could also result in a deficit.

The worsening trade deficit is causing worries that the trade balance may result in a loss this year.

Exports fell by 8.7% in May, 14.3% in June, 20.2% in July, and 21.9% as of August 25.
Somewhat evening out the situation, imports declined 11% in June, 18.7% in July and 15.7% in August.

The KDI attributed the worsening trade balance to economic slowdowns in major target markets such as the U.S. and Japan, and downturns in the market for major export items such as semi conductors.

In spite of this result, an official at the Ministry of Finance and Economy said that although the trade balance was worsening he didn't expect a deficit because exports are usually concentrated at the end of month.