Seoul's trade deficit surges

Seoul's trade deficit surges

SEOUL (AFP): South Korea's trade deficit ballooned to US$8.6 billion in the first eight months this year, with both exports and imports sustaining vibrancy, the Ministry of Finance and Economy (MFE) said yesterday.

In August alone, the country's exports surged 39.6 percent to $10.61 billion, overwhelming an import rise of 34.4 percent or $11.51 billion in the month, MFE's preliminary tallies showed.

"South Korea's exports remained its strength, but imports showed signs of a slowdown as capital imports rode a downward trend," a ministry official said.

Economic researchers say South Korea's economy is on the verge of a reverse cycle after a 33-month-long expansion.

The August trade shortfall of 903 million dollars, which showed an improvement of $64 million from the year-earlier month, led the accumulated deficit in the first eight months to mark a 61 percent jump or 3. 26 billion dollars over the same period last year.

Exports in August were driven mainly by heavy and chemical products, that soared 58.5 percent from a year ago, and brisk shipments of automobiles and electronics, the ministry said. By region, exports to developing countries rose by 53.4 percent, while those to advanced countries grew 39.2 percent.

Import increases of capital goods and raw material goods decreased by 35.1 percent and 30 percent respectively in August, while consumer products rose by 37.8 percent due to Korean Thanksgiving holidays that fall on Sept. 8-10.