As imports lose steam, trade surplus bulks up

Korea’s trade surplus widened slightly in May from the previous month as exports shrank at a slower pace than imports, a government report showed yesterday.

The country’s trade balance was $2.4 billion in the black last month, up from the $2.1 billion surplus tallied in April, according to the report by the Ministry of Knowledge Economy.

This marked the fourth month that the country has posted a trade surplus, although trade volume contracted for the third straight month in annual terms.

Exports came to $47.2 billion last month, down 0.4 percent on-year, with imports also contracting 1.2 percent to $44.8 billion, the report said.

“The slight decrease in exports was caused by mounting global economic uncertainties that have hurt trade across the board,” the ministry said.

While auto parts, general machinery and steel have performed well, there was a sharp drop in overseas demand for ships, mobile communications equipment and petrochemicals, it added.

Overseas shipments of car parts and general machinery, which benefited from free trade agreements with the European Union last summer and the United States in March, rose 11.9 percent and 10.3 percent last month vis-a-vis May 2011, while steel and automobiles gained 6.2 percent and 3.7 percent, respectively.

Ship exports sank 17.4 percent while shipments of mobile communication equipment plunged 35.7 percent. Petrochemicals were down 17.1 percent.

On imports, local demand for capital and consumer goods as well as commodities declined, although higher international energy prices caused imports of crude oil and natural gas to go up.

Imports of crude oil and natural gas jumped 18.2 percent and 22.4 percent compared to the year before.

The latest report showed exports to the Middle East and Latin America soaring 38 percent and 22.4 percent on-year, with gains of 4.9 percent being reached for Japan. Outbound shipment for the United States, the European Union and China all fell by double digits.

Exports to China, Korea’s No. 1 overseas market, were down 10.3 percent.

Yonhap