If a countrys current account deficit shows that the countrys capital flow is imbalanced, the countrys currency may also face the risk of devaluation. Simply speaking, the current account is a simple judgment of a countrys foreign trade economy.
However, it is worth noting that although it is declining here, South Koreas commodity trade is still in surplus, but the surplus is smaller, so the final result is the current account deficit.
In addition, according to data released by the Korea Customs Office in June, exports fell 9.4% year-on-year in May, the sixth consecutive month of decline. Among them, chip exports fell by 30.5% year-on-year, a 2.2-fold increase over April. Imports fell by 1.9% year-on-year, less than expected 0.5% year-on-year growth.
As a typical export-oriented economy, foreign trade exports account for 50% of the Korean economy, of which semiconductor exports account for 25% of exports. Now exports are in a downward state, and the impact on the Korean economy is self-evident.
South Koreas current deficit and the global economy
This time South Koreas current account deficit, coupled with the impact of trade frictions provoked by the United States, poses a danger to the global economy.