South Korea’s August trade deficit rises to record level

Export growth in South Korea slowed in August, while imports accelerated. That leaves the trade deficit at a record high and the won under pressure, which is at its lowest level in 13 years.

Data from the Ministry of Commerce show that exports of goods increased by 6.6% in August compared to the same month last year. However, this was slower than the 9.2% increase in July.

Imports increased by 28.2%, significantly higher than in the previous month (21.8%).

This resulted in a trade deficit of $9.47 billion. It almost doubled from the previous month ($4.80 billion). This is the fifth consecutive month and the highest deficit since records began.

Meritz Securities economists said that while exports grew at a slower pace, imports increased due to high commodity prices. Crude oil accounts for more than half of South Korea’s imports.

The trade deficit has put further pressure on the South Korean won, which has depreciated by more than 11% against the dollar so far this year to its lowest level since April 2009.

Shipments to the U.S. and EU increased 13.7% and 7.3%, respectively, but shipments to China declined 5.4%, contributing to losses for the third consecutive month.

Sales of petroleum products rose 113.6% and motor vehicles 35.9%, while the country’s top-selling semiconductors fell 7.8%.

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