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Thu, Jul 02, 2009 - Page 10 News List

South Korea trade surplus surges amid declining exports


South Korea’s trade surplus reached a record US$7.4 billion last month after exports fell at a slower-than-expected pace, government figures showed yesterday.

Exports last month totaled US$33 billion, falling 11.3 percent year-on-year, while imports declined 32.3 percent to US$25.6 billion, the Ministry of Knowledge Economy said in a report.

The previous record monthly surplus was US$5.7 billion in April.

The ministry said exports, the economy’s leading driver, recorded an eighth straight month of year-on-year negative growth last month. But the pace of the decline had improved markedly from the 28.5 percent contraction reported for May.

For the first half of this year, exports declined 22.3 percent year-on-year to US$166.1 billion, with imports falling 34.6 percent for a record surplus of US$21.6 billion. The ministry said Asia’s fourth-largest economy could have a trade surplus of more than US$30 billion for the whole of the year.

Exports this year will likely fall 14 percent to US$361.1 billion and imports by 24 percent to US$330.1 billion, it said.

Meanwhile, South Korea’s inflation rate dipped to a 22-month low last month, figures showed yesterday, easing fears that price rises could hamper an economic recovery bolstered by stimulus spending.

The National Statistical Office said the consumer price index rose 2 percent last month from a year earlier, slowing from a 2.7 percent year-on-year rise in May.

The figure last month was the slowest annual growth since August 2007.

Core inflation, excluding volatile oil and food prices, was 3.5 percent last month compared with May’s 3.9 percent.

“Eased inflation is attributed to lower prices of agricultural products thanks to their increased supply and relatively lower oil costs compared with last year, when crude surged,” the office said.

Inflation hit a 10-year high in July last year on high costs of oil and other commodities, but prices have been stabilizing since the global recession depressed world demand.

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