Trade returns to surplus in February

Korea recorded a trade surplus of $2.2 billion in February, fueled by strong overseas demand for automobiles, steel, machinery and petroleum exports, and marked a sharp turnaround from the $2.03 billion deficit posted in January.

Exports reached $47.18 billion last month, up 22.7 percent on-year, while imports jumped 23.6 percent to $44.98 billion, according to a report by the Ministry of Knowledge Economy released yesterday.

An increase in the number of working days compared to January and brisk demand for local products buoyed exports while rising international crude oil prices contributed to the increase in imports, the ministry said.

“Korea is likely to maintain a trade surplus throughout the year, but the amount is expected to shrink due to lingering problems in advanced economies,” said Kim Chang-bae, an economist at the Korea Economic Research Institute.

“This year’s trade surplus will be about half the amount of last year’s.”

Shipments to the United States, the European Union and Japan soared 64.5 percent, 30.4 percent and 31.9 percent on-year, respectively. Exports to the Middle East, the Association of Southeast Asian Nations and China also increased 39.1 percent, 24.3 percent and 14.5 percent.

Auto, steel and petroleum exports soared 60.2 percent, 44.4 percent and 41.9 percent, respectively. However, exports of mobile phones dropped 32.6 percent as companies increased overseas production.

Imports also grew at a fast rate with steady rises in the prices of both crude oil and natural gas. Crude oil climbed to $117 per barrel in February from $98.4 a year ago while natural gas increased to $762.7 per ton from $578.1 on-year.

Economists are generally optimistic about Korea’s export outlook, but say growth may not be as strong as it was in 2011.

“The situation in January was something temporary, but with oil prices on the rise and the economic slump in the United States and Europe, it is not certain whether Korea can continue its trade surplus,” said Yoon Sang-ha, an economist at the LG Economic Research Institute.

Yoon also pointed out that the weakening of the yen may have a serious impact on Korean exports.

“Korea’s auto exports have benefited from a strong yen and if the yen’s value falls, local automakers may face difficulties,” he said.

Korea’s trade volume topped $1 trillion for the first time in its history last year, driven by a 19.3 percent spike in exports that reached $556.51 billion. According to the World Trade Organization, this made the country the world’s seventh largest exporter, the ninth largest importer and the ninth biggest economy in terms of overall trade.

By Limb Jae-un [jbiz91@joongang.co.kr]