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August 15, 2009
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| Korea’s current account deficit with Japan has been snowballing in the last decade due to its heavy dependence on Japanese goods to power its export-driven economy, central bank data showed yesterday. Seoul’s cumulative current account shortfall with Tokyo stood at $174.9 billion in the 1999-2008 period, with the deficit widening sharply almost every year during the decade, according to the data by the Bank of Korea. The hefty current account deficit came as Korea imported large amounts of Japanese components and materials to make end-use products mostly for outbound shipments, analysts said. “The ballooning deficit with Japan is a structural problem,” said Kwon Sun-woo, an economist at the Samsung Economic Research Institute. “Korea needs to nurture its parts industry as well as its core technologies.” Bucking the long-term trend, however, Korea’s current account deficit with Japan narrowed this year as a weaker Korean won against major currencies helped boost its exports to Japan. The shortfall stood at $14.8 billion in the January-July period this year, down 26.6 percent from the same period last year, according to the BOK. The nation’s current account, the broadest measure of cross-border trade, has been in the black since February with imports falling sharper than exports. In June, Korea posted a current account surplus of $5.43 billion, the second-largest monthly amount ever. Yonhap |
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