Trade balance deteriorates

Export prices are falling, while import prices are rising gradually, deteriorating Korea¡¯s trade surplus year after year.

The Bank of Korea reported Jan. 8 that in 2000 export prices dropped 1.0 percent, while import prices rose 7.6 percent. As a result, the trade balance index -- the export prices index divided by the import prices index -- stood at 80.0, showing more deterioration than in 1999 (87.5).

The trade surplus index stood at 105.5 in 1993, and fell to 95.1 in 1996 and to 92.6 in 1997.

The deterioration of the surplus means that the prices to purchase foreign goods are rising more rapidly than the prices of selling goods abroad. In other words, the nation¡¯s earnings from international trade are declining.

Hong Chan-Sun hcs@donga.com