S. Korea logs record high exports, largest ever trade deficit in 2022

SEOUL– South Korea’s exports rose 6.1 percent in 2022 from a year earlier to reach an all-time high, but it suffered the largest ever trade deficit on high global energy prices, the industry ministry said Sunday.

The country is forecast to see a 4.5 percent fall in exports in 2023 on a global economic slowdown and weak chip prices, and the government will make all-out efforts to prop up exports and maintain growth momentum, the ministry said.

Outbound shipments stood at US$683.9 billion last year, the largest annual figure since 1956, when the country began compiling trade related data, according to data compiled by the Ministry of Trade, Industry and Energy.

The previous record was set a year earlier with $644.4 billion, the ministry said.

The record exports were on the back of solid global demand for the country’s major export items, including semiconductors and petro products, as well as the largest-ever sales of electric vehicles and secondary cells.

The performance put the country at the world’s sixth-largest exporter, up one notch from a year earlier, following China, the United States, Germany, the Netherlands and Japan.

Imports spiked 18.9 percent on-year to $731.2 billion last year, resulting in a trade deficit of $47.2 billion.

It is the first time since 2008 that the country suffered a trade deficit, and the shortfall is more than double of the previous record deficit of $20.62 billion logged in 1996, according to the ministry.

South Korea depends on imports for most of its energy needs, and the country’s energy imports surged more than 40 percent on-year to $190.8 billion in 2022, the ministry said.

For December, monthly exports fell 9.5 percent on-year to stand at $54.99 billion, extending the losing streak to the third consecutive month.

Imports went down 2.4 percent on-year last month to $59.68 billion, and the monthly trade deficit came to $4.69 billion.

Imports have exceeded exports in South Korea since April, and it is the first time since 1997 that the country has suffered a trade deficit for nine months in a row.
By item, outbound shipments of memory chips, a key export item, inched up 1 percent on-year in 2022 to a record high of $129.23 billion amid a global economic recovery in the first several months of last year.

Semiconductors accounted for about 20 percent of exports by South Korea, home to Samsung Electronics Co. and SK hynix Inc.

Exports of petroleum products soared 65.3 percent to $63.02 billion in 2022, also an all-time high, on high oil prices.

Auto exports advanced 16.4 percent to $54.1 billion last year as a global shortage of automotive chips has eased and demand for eco-friendly cars has risen across the world. Exports of secondary cells jumped 15.2 percent on-year to $9.99 billion, the data showed.

By nation, exports to China, South Korea’s largest trading partner, fell 4.4 percent on-year to $155.81 billion in 2022 amid its strict zero-COVID-19 policy.

But sales in the Association of Southeast Asian Nations (ASEAN) increased 14.8 percent to an all-time high of $124.95 billion, and those to the U.S. rose 14.5 percent to a record high of $109.82 billion led by strong demand for vehicles and cells, in particular.

Exports to the European Union nations also set a record high of $68.13 billion by rising 7.1 percent on-year, the data showed.

Sales in India and the Middle Eastern nations marked a double-digit growth to come to $18.88 billion and $17.51 billion, respectively.

But exports bound for the Commonwealth of Independent States retreated 17.7 percent to $11.28 billion last year amid the Russia-Ukraine war, the ministry said.

“Dwindling exports and a large deficit have weighed down our economy. We take the current situation seriously and will mobilize all possible capabilities to prop up exports,” Industry Minister Lee Chang-yang said.

The government vowed to expand trade financing and devise strategies to expand the country’s presence in emerging markets and resources-rich nations. Its focus will also be on how to boost exports in such “promising” fields as nuclear power generation, plant construction and military items, he added.

Source: Yonhap News Agency

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