Terms of trade sink to nine-year low

Korea's terms of trade hit the lowest level in more than nine years in December as import costs rose at a much faster clip than export prices, central bank data showed Thursday.

Korea's terms of trade hit the lowest level in more than nine years in December as import costs rose at a much faster clip than export prices, central bank data showed Thursday.

The nation's net terms-of-trade index for goods -- a gauge of overall trade terms -- stood at 87.72 last month, down 10.4 percent from a year earlier, according to preliminary data from the Bank of Korea (BOK).

The December tally represented the lowest mark since November 2012. It was also down 0.7 percent from the previous month.

For all of last year, the index was down 2.8 percent from the previous year.

The figure is calculated by dividing the index for export prices by that for import prices. It shows the amount of imports a country can buy for each unit of exports. The base year is 2015, with a benchmark index of 100.

Last month, import prices spiked 29.9 percent from a year earlier, while those of exported goods swelled 16.4 percent.

The index for the value of exported goods jumped 22 percent on-year to a new high of 146.64 last month on brisk exports of chips, petrochemicals and other key products, marking the 14th straight month of on-year gain. For all of 2021, the index was up 26.5 percent from the prior year.

The index for the value of imported goods soared 37.6 percent to an all-time high of 170.64 in December due to soaring international materials costs, marking the 13th consecutive month of on-year increase. For the whole of 2021, it was up 32 percent from a year earlier.'

Yonhap