Yearly Trade Surplus Breaks Record at $40.98 Bln

Korea is expected to overtake Japan in the amount of annual trade surplus for the first time, with Asia’s fourth-largest economy recording a record trade surplus last year of 40.98 billion U.S. dollars.

The Knowledge Economy Ministry Friday released a report on export and import trends in 2009 and their prospects in 2010, saying exports reached 363.8 billion dollars and imports 322.8 billion dollars.

The surplus is the largest since 1998, when the figure hit 39 billion dollars on the back of plunging imports in the wake of the Asian financial crisis.

Last year’s surplus is far higher than Japan’s. In the first 11 months of last year, Korea’s trade surplus was 37.7 billion dollars while Japan’s was 24.1 billion dollars.

A ministry official said, “Unless Japan had a trade surplus of more than 16 billion dollars in December, it will be difficult for the country to surpass Korea.”

Korea also overtook the U.K. and Canada to become the world’s ninth largest exporter last year. The ministry said Korea is just the third country to join the list of the world’s top 10 exporters since 1950. Japan entered in 1955 and China in 1997.

Korea is also expected to take up more than three percent of the global export market. The share of Korean products on the global market reached two percent for the first time in 1989.

Last year, the country witnessed a recessionary surplus in which both exports and imports declined. In December last year, however, exports rose 33.7 percent and imports grew 24 percent from the same period the previous year.

Exports markedly increased in developing countries, which were less affected by the weaker Korean won and the global economic crisis.

By item, LCD devices (28.5 percent) and ships (4.4 percent) saw the largest increases.

Imports plunged last year due to falling oil prices and weak domestic consumption. Imports of raw materials plummeted 32.9 percent from a year ago due to declines in oil and raw material prices.

Those of capital goods such as semiconductor equipment dropped 16.7 percent and those of consumer goods such as furniture and cars declined 16.4 percent.

Both exports and imports are expected to recover their levels seen before the global economic crisis this year. The ministry forecast this year’s exports at 410 billion dollars, up 12.7 percent from last year, and imports at 390 billion dollars, up 20.8 percent, resulting in a trade surplus of around 20 billion dollars.

The ministry also said ship exports will decline due to a downturn in the shipping industry, but this will be offset by increases in exports of IT items such as semiconductors, display devices and cars.

achim@donga.com