By Kim Hyun-cheol
Staff Reporter
Fueled by high overall import prices, the nation's trade deficit with Japan has exceeded the $30 billion mark this year for the first time.
As of the end of November, the trade imbalance reached $30.9 billion, up 12.6 percent year-on-year, the National Customs Service (NCS) said Sunday. The comparable figure was $3.4 billion in the same 11-month period the previous year.
With one month remaining, the aggregate is already 3.3 percent higher than the country's total annual deficit of $29.9 billion last year. It has been reaching record highs in recent years, starting from $25.4 billion in 2006.
A weakening won, combined with growth in bellwether businesses, had shipments from the neighboring country snowballing, industry sources say.
Chronic reliance on high-tech Japanese firms is not slowing. As the semiconductor, mobile handset and plant construction businesses picked up throughout the year, imports of core parts and equipment from their Japanese counterparts grew accordingly, creating a vicious circle of more outbound shipments leading to a greater deficit with Japan.
Sharp depreciation of the Korean currency also influenced the trade imbalance by boosting import prices of Japanese-made items.
The won has lost over 40 percent against the Japanese yen so far this year. The ratio of the yen and the won was approximately 1:8 in October last year, but has soared to over 1:14, which means the Korean currency lost its value by more than 40 percent in that period.
In a hopeful and ironic sign, the deficit is likely to decrease in coming months with oil prices constantly falling and Korea's exports also struggling amid the global slowdown. In November, the nation's deficit with Japan was tallied at $1.8 billion, down 28.9 percent from the previous year.
The NCS report also showed the trade deficit hiked along with Middle Eastern countries, surpassing $70 billion for the first time.
South Korea posted a cumulative $71.8 billion trade deficit with the oil-rich Arabian countries in the January - November period, up over 70 percent from the previous year because of turbulent crude oil prices, which peaked to near $150 per barrel in July before nose-diving to below $40 per barrel in the second half of the year.
By November, the country's overall trade deficit was $13.7 billion. Earlier, the Ministry of Knowledge Economy said South Korea would end up with a $9 billion deficit at the end of the year, the worst showing since 1996.