South Korea’s 2011 terms of trade deteriorated to the lowest level in three years as oil price hikes pulled up import costs, outpacing moderate gains in export prices, the central bank said on Tuesday.
The country’s net terms-of-trade index for goods stood at 78.9 last year, down 8.3 percent from 2010, marking the sharpest annual fall since the 2008 global financial crisis, according to preliminary figures released by the Bank of Korea (BOK).
On a quarterly basis, South Korea’s net terms-of-trade index for goods, a key gauge of trade terms, fell 8.9 percent on-year to 76.6 in the final quarter of 2011.
The fourth quarter figure was also the lowest since a record low of 75.1 tallied in the last quarter of 2008 in the wake of the U.S.-sparked financial turmoil.
The index is calculated by dividing the export price index by the import price index. The base year is 2005 with a benchmark index of 100.
The worsened figures are attributed to the steep rise in import prices of commodity and crude oil in particular, the BOK said.
While per-unit export prices rose 8.5 percent on-year to 109.8 in 2011, per-unit import prices surged 18.4 percent to 139.3 in the same period, according to the central bank.