Seoul Trade Deficit Surges 600%

The two items decided the colour, even though some positive signs were noted in overall trends, Lee Jae-gil, the ministrys director general for trade policy, told a news conference.

South Koreas trade deficit in the month reached $1.57 billion, compared with a $207 million shortfall a year earlier, the ministry said in a statement.

This brought the cumulative deficit for the first 10 months of this year to $16.78 billion, sharply up from a $9.6 billion deficit for the same 1995 period.

The government aims to keep the nations total trade deficit for this year below $19 billion, compared with a $10.06 billion shortfall for the whole of 1995.

I see no problem in attaining the goal as exports in the last three months are traditionally brisk, said Lee.

But analysts expressed doubts that the target was attainable, saying that this years fourth quarter should be different from last year.

I dont think the target is achievable. A cyclical upturn in exports is unlikely this year, said Namuh Rhee, head of research at Dongbang Peregrine Securities. We see it would be slightly over $20 billion. He said semiconductor exports peaked in November last year and there are no signs of recovery in the global market.

The international unit price of 16-megabit dynamic random access memory (DRAM) chips stayed at the $10 level in October, 80.2 per cent lower than a year earlier, the ministry statement said.

Semiconductor exports fell 44.4 per cent year-on-year in October to $1.31 billion, while total exports excluding semicondutors gained 15.4 per cent to $10.59 billion, it said. The ministrys Lee also expected sluggish semiconductor exports to continue at least for the rest of this year.

Frankly, I dont see semiconductor exports recovering within this year, Lee said. But I hope the recovering trends in the exports of other products will gain further momentum.

Auto parts and oil products led brisk exports of non-semiconductor items, rising by 43.4 per cent and 33.6 per cent respectively from a year earlier, the statement said.

A surge in international crude oil prices, affected by tension in the Middle East since September, pushed up the value of the nations crude oil imports as winter approaches, Lee said.

Crude prices rose to around $22.20 per barrel in October, compared with $16.86 a year earlier, the statement said.

The nations crude imports for the first 20 days of October rose 55.4 per cent year-on-year to $8.39 million, it said.

Letters of credit received by South Korean exporters for the year to October 20 fell 4.7 per cent from a year earlier. Import licences issued in the same period increased 9.2 per cent.

Stock slump delays sell-offs

Reuter SEOUL

A slump in South Koreas stock market has forced the government to delay plans to privatise four big state-run corporations, the finance ministry said on Friday.

Another reason for freezing plans to sell stakes in Korea Gas Corp, Korea Tobacco & Ginseng Corp, Korea Telecom Corp and Korea Heavy Industries & Construction Corp was fear that they could be snapped up by the countrys private business conglomerates, a senior ministry official said.

Given the current depression of the stock market, it will be difficult to sell a large amount of government stock, said Suh Seung-il, director of the ministrys treasury bureau.

The stock market is now down about 22 per cent from its high of 986.84 in May. President Kim Young-sam announced a sweeping privatisation programme after he came to power in 1993.Since then, however, the government has launched an effort to curb the concentration of economic power in the hands of the giant private groups, known as chaebol.

Korea Gas and Korea Heavy Industries & Construction were to be privatised in 1995, while the Korea Tobacco & Ginseng Corp