(2nd LD) S. Korea`s trade surplus hits record US$4.6 bln in March

(ATTN: UPDATES with more details in paras 3, 5 11-15; ADDS official comments in
paras 6-10)
By Lee Joon-seung
SEOUL, April 1 (Yonhap) -- South Korea's trade surplus reached a record US$4.6
billion in March mainly due to a sharp drop in imports and a surge in exports of
ships, a government report showed Wednesday.
The country's exports reached $28.3 billion last month, falling 21.2 percent
on-year, with imports plummeting 36 percent to $23.7 billion, according to the
Ministry of Knowledge Economy.
The monthly surplus surpassed the previous record of $3.8 billion tallied for
April 1998 when the country struggled to cope with the Asian financial crisis by
cutting back on spending. The import decline is the second-sharpest since a 39.3
annual drop reported for October 1998.
The ministry said ship sales, which grew 61 percent from a year earlier,
continued to help exports. Favorable exchange rates, more working days and
efforts to increase trade-related financing also helped increase outbound
shipments.
The exchange rate reached an average of 1,453 won to the U.S. dollar last month
compared to 1,000 won to the greenback in March 2008, contributing to the
favorable balance of trade.
"The government expects exports to contract by roughly 20 percent up into the
third quarter, but there are positive signs that indicate the South Korea economy
may have hit bottom in late 2008 and early this year and may start to make modest
gains," said Lee Dong-geun, deputy minister in charge of trade and investment.
Lee cited South Korean manufacturers taking larger market shares for ships, cars
and semiconductors. Outbound shipments have also tallied positive growth since
February if measured in Korean won, according to the official.
The deputy minister pointed out that while South Korean exports have been
contracting by double digits, other trading nations like Japan and China were
also experiencing similar difficulties as the global economic crisis sapped
demand.
Lee added that export volume grew $2.9 billion last month compared with February,
a compared with a $1.2 billion gain in imports.
"Overall, exports seem to be making steady gains while import growth has been
curtailed in large part due to the 50 percent drop in the price for crude oil,
which accounts for a fifth of all inbound shipments," the official said.
Despite Lee's positive outlook, the latest trade statistics showed outbound
shipments of Korea's staple exports -- liquid crystal devices, steel, textiles,
mobile communications equipment, autos and semiconductors -- all posting minus
growth.
Exports of displays and semiconductors, which had fueled gains in the past, were
down 8 percent and 38 percent, respectively, in the cited month.
The latest figures showed exports to Oceania and Africa growing 169.2 percent and
97.1 percent, respectively, last month compared with the year before. Numbers for
the European Union, China, the United States, Japan and the Association of
Southeast Asian Nations all fell by double digits.
The ministry predicted South Korea's export volume will start to post positive
growth approaching 10 percent in the fourth quarter, with the annual trade
surplus to top $20 billion from the original target of $12 billion.
At the present rate, the country's exports will not be able to match the $422
billion tallied for last year, the ministry said, predicting a fall of around 5
percent to $400 billion.
For the first three months of this year, the country's trade surplus reached $3.9
billion, a sharp turnaround from a deficit of $6.6 billion reported for the first
quarter of 2008.
yonngong@yna.co.kr
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