Seoul - South Korea on Friday posted its first trade deficit since 1997, as exports nosedived in November and December because of shrinking foreign demand, officials said. Exports in 2008 grew 13.7 per cent to 422.4 billion dollars, the sixth year double-digit growth in a row, despite a sharp drop in the last two months of the year. Imports rose by 21.5 per cent to 435.4 billion dollars, leading to a trade deficit of 13 billion dollars, the Economy Ministry said.
In December, exports dropped by 17.4 per cent to 27.3 billion dollars year-on-year, after dropping by 19 per cent in November. Imports fell by 21.5 per cent to 26.6 billion dollars.
The ministry expects only a 1-per-cent export growth rate for 2009, the slowest rate in eight years. Imports are forecast to drop by 4.7 per cent.
The deficit was mainly caused by price hikes in oil, commodities and other industrial goods, the ministry said. South Korea's main exports are petrochemicals, cars, semiconductors, machinery, ships and consumer electronics such as mobile phones and flat screen televisions.
South Korea's central bank predicted a 2-per-cent growth rate for 2009, after 3.6 per cent the previous year. However, a number of experts predict the economy will contract for the first time since the Asian economic crisis in the 1990s.
