Trade Surplus Expected to Shrink More Than 50 Percent Next Year
By Jane Han
Staff Reporter
After hitting a record high this year, South Korea's trade surplus is expected to shrink by between 50 and 75 percent next year largely because the global economic recovery is going to make importing key raw materials more costly.
According to government data, the Lee Myung-bak administration is forecasting that the country's exports will increase by 11 percent next year to $393.5 billion, while imports will jump 16 percent to $383.7 billion.
This means the annual trade surplus for Asia's fourth-largest economy will reach $9.8 billion, which is less than a fourth of this year's figure.
South Korea's trade balance has been in the black for nine straight months this year, with the surplus for the January-to-October period amounting to $34.58 billion, surpassing the previous high of $31.9 billion surplus set during the first 10 months of 1998.
Strong demand from emerging markets helped drum up sales of tech products, including liquid-crystal-display devices and semiconductors, which powered exports through most of this year.
Experts say outbound shipments will continue to improve, but imports will go up at the same time amid the economic recovery as local companies start increasing purchases for bigger output.
"A decline in imports of oil and other key raw materials is quickly easing, which means that the country is spending more money to buy goods from overseas," said an official of the Ministry of Strategy and Finance.
Private think tanks are putting our similar forecasts.
Samsung Economic Research Institute said it expects next year's exports and imports to reach $399 billion and $382.9 billion, respectively, leaving a $16.2 billion surplus.
Hyundai Economic Research Institute sees a slightly bigger surplus of $22 billion, as it projects $393.6 billion and $371 billion in exports and imports, respectively.