$5.9 Billion in Exports, $7.3 Billion in Imports

Due to continuously falling exports, it is highly likely that trade balance and the nation`s current account balance will record a deficit in August.

According to the Ministry of Finance and Economy and the Ministry of Commerce, Industry and Energy yesterday, exports stood at $5.919 billion, falling 17.7 percent compared with the same period of the last year. Imports stood at $7.297 billion, falling 12.9 percent compared with the same period of the last year.

Due to the falling exports, the trade balance recorded a deficit of $1.378 billion during the first 20 days of this month. The trade balance posted a surplus of $403 million in July.

Considering the export structure that tends to increase at the end of the month, it is premature to predict that the balance of international payments would turn to a deficit. However, an official at the Ministry of Finance and Economy said that ``Since exports in main products, including the information technology (IT) products, are not recovering along with the relatively slight decrease in imports, it is highly likely that the trade balance as well as the nation`s current account balance in August may turn to negative.``

As exports are making a little progress, the annual trade balance surplus is more likely to be reduced. The government forecasted in July that despite the recent decline in exports, ``the annual current account balance surplus will exceed the last year`s $11 billion due to the decreasing imports.``

According to the Bank of Korea, the nation`s current account surplus stood at $1.04 billion in June, drastically down from $2.16 billion in May. Although trade balance posted a surplus of $1.81 billion in June, slightly down from $2.09 billion in May, service balance, income balance, and current transfers account balance all recorded a deficit.

Economic analysts forecast that if the government stresses the stimulation of the domestic demand to boost the nation`s economy, the balance of the international payment can worsen due to the increase in imports.

yhchoi65@donga.com