Fiscal balance expected to lose 70 trillion won this year
As energy imports surged, the trade balance showed a deficit of 5.2 billion dollars until the 20th of this month. Concerns are rising over the ‘twin deficit’, in which the current account and fiscal account are also in deficit.
According to the Korea Customs Service on the 21st, exports from April 1 to 20 this year amounted to 36.3 billion dollars (about 45 trillion won) and imports were 41.5 billion dollars, respectively, compared to the same period last year, exporting 16.9% ($5.26 billion) and importing 25.5 billion dollars, respectively. % ($8.43 billion) increased.
As energy imports surged, imports outpaced exports, resulting in a trade deficit of $5.199 billion. During the same period last year, the trade deficit was $2.054 billion. Imports of crude oil rose 82.6% to $6.875 billion in the same period last year, gas imports surged 88.7% to $1.942 billion, and coal increased 150.1% to $1.49 billion.
According to the Bank of Korea, the domestic current account surplus was $6.42 billion in February this year, but the size of the surplus decreased by $1.64 billion compared to the same period last year. This is because the trade balance has deteriorated. According to the National Assembly Budget Office, the consolidated fiscal balance after subtracting the total expenditure from the total government revenue is also expected to be in a deficit of 70.8 trillion won this year. Joo Won, head of the economic research department at Hyundai Research Institute, analyzed, “The twin deficit could have a negative impact on the overall Korean economy, including external credibility, exchange rates, and foreign exchange reserves.”
Sejong = Reporter Kim Hyung-min kalssam35@donga.com