(2nd LD) S. Korea`s trade surplus tops US$5.1 bln in July

(ATTN: UPDATES with more details, comments from para 3)
By Lee Joon-seung
SEOUL, Aug. 1 (Yonhap) -- South Korea's trade surplus reached US$5.14 billion in
July as imports plunged faster than exports, a government report showed Saturday.
Exports fell 20.1 percent on-year to $32.73 billion last month, while imports
plummeted 35.8 percent to $27.59 billion, according to the report by the Ministry
of Knowledge Economy.
The monthly surplus is smaller than the record $7.27 billion tallied for June,
but total trade volume exceeded the $60 billion mark for the first time since
October 2008 when the world started to feel the effects of the U.S.-led financial
crisis, which sapped consumer and business demand.
The ministry said exports of ships, which have played a crucial role in helping
the country maintain a trade surplus in recent months, gained 7.6 percent on-year
with outbound shipments of liquid-crystal displays (LCD) surging 33.6 percent.
LCD exports have been fueled by steady rise in overseas demand for digital TV
sets.
But exports of mobile communication equipment, semiconductors, autos and textiles
all posted negative growth, although the rate of decline improved compared to the
first half of the year.
Exports of mobile communication equipment declined 12.2 percent, with
semiconductors and autos falling 15.5 percent and 18.1 percent, respectively, in
the cited month.
Outbound shipments to China, South Korea's top export market, dropped 15.7
percent annually, with shipments to the European Union and the United States
falling 35.8 percent and 26.5 percent, respectively.
The ministry, which is in charge of trade promotion, said imports continued to
fall short of last year's total because of a noticeable decline in prices for
crude oil, natural gas and other raw materials.
Oil and natural gas imports were down 51.5 percent and 65.9 percent on-year, with
steel imports also plunging 59.7 percent.
The latest tally showed that despite a 13.1 percent decline in capital good
import spending last month, local companies were beginning to buy more
semiconductors and precision machinery parts from overseas, potentially leading
to production gains, the ministry said.
The trade surplus in July marks the sixth straight month that the country posted
a monthly trade surplus.
In the first seven months of this year, South Korea shipped $198.39 billion worth
of goods -- a drop of 22.2 percent compared to last year. It imported $172.15
billion in the same period for a surplus of $26.23 billion.
Last year during the same period, the country trade balance was in the red by
$8.89 billion.
Kang Myung-soo, head of the ministry's export-import division, said there is some
uncertainty about crude oil prices and fluctuations in foreign exchange rates, in
addition to concerns about trade protectionism.
"To counter such concerns the government plans to redouble its efforts to expand
export insurance coverage and support overseas marketing efforts," he said.
The government expects the trade surplus will narrow in the second half, Kang
said. It has also predicted that both exports and imports will pick up by
November.
For the whole of this year, Seoul expects the trade surplus to exceed $31
billion, a turnaround from a deficit of a little over $13 billion last year.
yonngong@yna.co.kr
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