S. Korea trade surplus to top US$4 bln in March: official

(ATTN: UPDATES with more details in para 7; ADDS with comments on FDI in paras 8-9)
By Lee Joon-seung
SEOUL, March 16 (Yonhap) -- South Korea's trade surplus may top a record US$4
billion in March thanks to a sharp drop in imports, a senior government official
said Monday.

Lee Dong-geun, a deputy minister at the Ministry of Knowledge Economy, told
reporters that preliminary tallies showed imports falling over 33 percent
annually until the middle of the month, with exports contracting by around 22
percent.
He said if international energy prices and exchange rates remained at present
levels, the size of the surplus could exceed the all time record reached in April
1998.
In that month, South Korea reported a surplus of $3.85 billion as it struggled to
cope with the Asian financial crisis by cutting back on investments and spending.
"Exports are falling but prices of crude oil, natural gas and raw materials have
nose-dived due to the worldwide economic slump," the official in charge of trade
promotion said.
If the surplus is reached, it will mark the second consecutive month that the
country's trade balances stood in the black. In February, the trade surplus
totaled $2.93 billion after a deficit of $3.35 billion in the first month of the
year.
Lee, meanwhile, said that while exports may continue to contract by 10-20 percent
until September, a modest turnaround may be possible in the fourth quarter, with
the size of the surplus to hover at around $2-3 billion per month throughout the
year.
On foreign direct investment (FDI), the official conceded that there is a 70
percent drop so far.
"Businesses around the world are just not investing in new projects, so if this
trend continues, it may be hard to reach the $12.5 billion FDI target set earlier
in the year," he said. The senior-level policymaker, however, pointed out that
since outbound investment -- usually three times the size of inbound FDI -- is
almost non-existent, there will be almost no effect on the country's current
account.
For the whole of 2009, the expert said that a trade surplus of $18-20 billion may
be reached, although exports may not reach the $422 billion tallied for 2008.
Originally, the ministry in charge of industrial policy and trade said it would
aim to push up exports to $450 billion for the year, but began adjusting its
targets in the face of weak demand abroad.
yonngong@yna.co.kr
(END)