S. Korea's trade deficit expected to reach US$6 bln this year: minister

By Lee Joon-seung

SEOUL, Oct. 6 (Yonhap) -- South Korea's annual trade deficit is expected to reach US$6 billion this year after staying in the black for more than a decade, a senior policymaker said Monday.

Knowledge Economy Minister Lee Youn-ho said at a parliamentary audit session that
the deficit is the result of unexpectedly high energy prices and the dollar's
surge against the won that the government did not properly predict.
The ministry revised its forecast in July for this year's trade balance to $1.9
billion in the red from an earlier forecast of a $13 billion surplus, similar to
the figure for the previous year. The trade deficit stood at $14.24 billion up
till the third quarter.
"We admit that we were off the mark in key factors," he said, adding that
exchange rate uncertainties remained. The minister then said that because the
slowdown in the global economy will start being felt in the coming months,
conditions may get worse in the first half of 2009.
Dubai brand crude prices had surged to over $140 per barrel in July before
falling off to just under $90 per barrel last week, while the South Korean
currency closed at 1,269 won to the greenback at the end of trading, down 45.5
won from the previous session.
Other experts at the ministry said that the country will post a surplus in the
remaining three months of the year that will reduce the deficit.
They said that while the size of the deficit is large, it will certainly not
surpass the $8.45 billion reached in 1997, when the country was rocked by the
Asian financial crisis.