The Magazine for Asian Investors
Bank of Korea expects trade deficit to continue due to high oil prices
The South Korean central bank (BOK) has reported that South Korea is likely to run a trade deficit for some time. The country has been pressured by a global economic slowdown and high oil prices, with nearly 80% of the total trade deficit this year due to rising oil prices.
According to the report, South Korea recorded a trade deficit of $24.7 billion between January and August. This is a decrease of $45.4 billion compared to the same period last year.
The BOK estimates that a $10 drop in global oil prices based on annual average prices would help improve South Korea’s trade balance by about $9 billion.
The BOK’s August economic forecast also said South Korea is likely to post a trade deficit of $29 billion this year, an unprecedented result that will turn into a modest trade surplus of $1 billion next year.
