As imports and raw material prices soared, the dollar strengthened and import-led inflation continued to rise due to the reproduction of the slow-flationary slowdown in high inflation.
As of November 20, imports increased 41.9% (USD 11.8 billion) from the same period last year to USD 39.8 billion, and exports amounted to USD 39.9 billion, an increase of 27.6% from USD 8.6 billion in the same period last year, significantly reducing the trade surplus.
The increase in imports was concentrated on gas (167.7%), crude oil (118.1%), semiconductors (31.0%), and machinery (7.3%), while exports were semiconductors (32.5%), ships (252.2%), and petroleum products (113.6%). , computer peripherals (51.4%), etc. increased, while passenger car exports decreased by 1.9%.
According to the Bank of Korea’s ‘Consumer Trend Survey in November’, expected inflation rose 0.3 percentage points to 2.7% in the previous month, the largest increase since the increase was 2.8% from 2.5% in January 2017.
Consumer expectation inflation has already entered the 2% range in February and has been in the 2% range for 10 consecutive months.
In its 'International Financial Market Trends and Major Issues' on the 22nd, the Bank of Korea's Foreign Investment Management Institute said that major investment banks (IBs) will continue to lack liquidity in the US Treasury bond market for the time being. It is diagnosed as “accelerating the strengthening of the dollar,” and it is expected that inflation led by a surge in imports will intensify.
On October 18, the Korea Foreign Investment Management Agency said, “Many IBs have suggested that slow inflation can be reproduced similar to when raw material prices rose after the 2000s. I expressed my opinion to reproduce the 'slow inflation' that occurred in 2010-2011."
However, IBs believe that if the US Federal Reserve maintains the existing scenario of continuing economic recovery amid temporary factors such as inflation in 2010-2011, but wide-ranging inflation due to the secondary ripple effect of rising energy prices and wage increases in the future. It suggested the possibility of increasing volatility in the financial market.
Regarding the shortage of labor market supply in the US, IBs said that the labor market supply was sluggish due to structural factors such as an aging population, a decrease in the number of immigrants, and the spread of early retirement.
U.S. investment banks such as JP Morgan and Citi said, "The liquidity shortage is expected to continue for the time being due to continued high inflation and the re-emergence of uncertainty related to the debt ceiling agreement while the incentives for transactions decrease toward the end of the year."
Logistics costs account for an average of 9.97% of the export value of Korean SMEs, a 40% increase from 6.84% in the first half of this year, the Korea Federation of Small and Medium Businesses announced on the 23rd.
South Korea's exports include most of the increased logistics costs, resulting in overpackaging due to the increase in exports of the Corona economy.
According to the Korea Economic Research Institute, which investigated the rise in raw material prices in export industries, the purchase price increase was △Steel 29.8% △Petrochemical·Product 26.3% △General Machine·Ship 19.5% △Electric and Electronic 12.5% △Biohealth 11.6% △Automobile·Part 10.5% As a result, it was announced on the 18th that the rate of increase in product prices was in the order of △ petrochemicals and products 19.6% △ steel 18.4% △ general machinery and ships 12.5% △ automobiles and parts 10.4% △ biohealth 7.5% △ electric and electronic products 6.9%.
The decline in operating profit was the largest for general machinery and ships at 8.8%, followed by △petrochemicals/products 7.1%, △biohealth 6.0%, △steel, 5.7%, △automobiles and parts, 5.2%, △electrical and electronics, 1.8%.