South Korea recorded a trade deficit of $47.5 billion for 2022, official data from the customs agency showed.
It marked the worst trade deficit since the agency started compiling data in 1956 and far more than the $20.6 billion trade deficit in 1996.
January exports fell $46.3 billion, or 16.6% – declining more than expectations for a drop of 11.3%. Imports fell $59 billion, or 2.6%, falling less than forecasts of a 3.6% decline.
That resulted in a deficit of $12.7 billion for January, more than the $9.27 billion expected by economists polled by Reuters.
The Korean won traded at 1,232.24 against the U.S. dollar following the report.
“There’s some expectation that the world economy won’t be facing as difficult of a situation as expected thanks to China’s reopening and unexpected growth from surrounding economies,” South Korea’s minister of economy and finance Choo Kyung-ho said in a meeting with officials on Wednesday.
“The widening trade deficit seen in January is widely seen to be due to seasonal factors such as an import in energy exports for the winter, as well as a sudden drop in chip prices, leading to a worsened picture,” Choo said.
This comes as global smartphone shipments dropped 18% to 296.9 million units in the final quarter of 2022 as demand fell, according to Canalys.
“Despite showing some stabilization in Q3, Asia Pacific and Europe suffered their worst Q4 performances in history in 2022,” said Canalys analyst Sanyam Chaurasia, adding shipments in Asia-Pacific fell by 8% in 2022 despite resilience throughout the year.
On Tuesday, chipmaker Samsung Electronics reported its worst quarterly profit in eight years, while SK Hynix also posted a record loss for the period.