South Korea’s trade deficit is widening, with the latest figures showing that exports grew at their slowest pace in 14 months in April, whilst imports increased due to the rising price of raw materials and energy.
Growth in exports of 12.6% from a year earlier is the slowest since February 2021, and well below analyst projections of 14.5%. A major contributor to the poor performance was a reduction in China-bound shipments in the wake of reduced demand as a result of lockdown measures in the country.
Exports to China, South Korea’s biggest trading partner, fell by 3.4%, whilst exports to the United States increased by 26.4% and to the European Union by 7.4%.
Exports for the month totaled $57.69 billion, trade ministry data showed, whilst imports totaled $60.35 billion, and increase of 18.6%. The resulting trade deficit of $2.66 billion is a large jump from the March deficit of $115 million.
The increase in imports was mainly driven by rising commodity prices with imports of crude oil, gas and coal worth $14.81 billion.
The export slowdown comes at a time of growing crisis for South Korea. The country is battling rising inflation, and the decision by the Bank of Korea last month to raise its benchmark rate to its highest since August 2019 has done little to calm the situation.