Compared to a year earlier, South Korea exported 32.8% less goods in January according to a report by the Ministry of Knowledge Economy. Only US$21.7 billion dollars in export was recorded, with a trade deficit of US$2.9 billion. December had a trade surplus of US$542 million.
Broken down by region, exports to China dropped 32.2%, to the EU 46.9%, to the US 21.5%, and to Japan 29.3%. Based on this report, the EU seems to be the hardest hit by the global financial crisis.
Chung Jae-hoon, head of the Trade and Investment Promotion Office of the Ministry of Knowledge Economy, said: “Besides the general drop off in demand around the world, a reduced number of working days due to the Lunar New Year holiday, and halting of production by carmakers to deal with rising inventory contributed to drop in exports.”
Imports also fell last month as South Korea’s demand for foreign goods fell more than 20 percent. Cold weather, however, caused imports of gas and coal to go up 51 percent and 62 percent last month from a year earlier. The ministry said exports may continue to lose ground for the near future with global trade volume likely to contract 2.8 percent in 2009 from a gain of more than 4 percent last year.
The country relies heavily on exports to fuel growth and reported a trade deficit of US$13.3 billion last year from a surplus of US$14.6 billion in 2007. For this year it is aiming for a surplus of around US$11 billion.
