Imports Still Outpacing Exports

For the second half of this year, the Bank of Korea expects the flow o
f exports to slow due to the wavering American domestic economy and th
e falling exchange rate between the won and dollar, but total exports
to increase firmly with the help of semiconductors, and information te
chnology and communication instruments. Exports will amount to $88 bil
lion, resulting from an added $5 billion over the export amounts of th
e first half of this year. Further, rate of increases will be reduced
to 13 percent from the 25.7 percent of the first half.
Imports as well are scheduled to stay high in the second half of this
year due to an active domestic economy and high oil prices. Imports ar
e estimated to amount to $83.9 billion, showing an increase of $5.3bil
lion, as the rate of increase of imports is supposed to drop to 28 per
cent from 44.7 percent.
The trade surplus for the second half of this year is expected to be a
s much as $4.1 billion, which is very close to that of the first half
of this year. The annual trade surplus will amount to $8.5 billion, sh
rinking $15.4 billion from the $23.9 billion surplus of last year.

With respect to the first half of this year, exports on the basis of c
ustoms clearance recorded 83 billion dollars, mostly consisting of car
s, and industrial chemical products, an increase of 17 billion dollars
over the same period last year. Export increases are showing the high
est figures, 25.7 percent, since the second half of 1995. Imports incr
eased to 78.6 billion dollars from 54.3 billion dollars last year, bec
ause of increased consumer spending in both the export and domestic ec
onomies, and the sharp rise of international oil prices.
In spite of steady exports, imports are growing faster, so the trade s
urplus for the first half of this year is estimated to be a mere 4.35
billion dollars. Trade to Japan and the Middle East is deep in the red
, whereas other trade areas are still in the black. During this Januar
y to May, the trade deficit with Japan worsened due to the continuousl
y increasing imports of electronic accessories and machinery. That def
icit has expanded to 5.1 billion dollars from 2.9 billion dollars. Mea
nwhile, the trade deficit with Middle Eastern countries is still sever
ely in the red to the tune of 6.8 billion dollars, shooting up from 2
billion dollars for the same period last year.