South Korea’s economic indicators keep turning red but policymakers have been slow to come up with a convincing strategy to tackle the mounting problems. Instead, they are repeating the same mantra that the country is outside the approaching storm.

Optimists, including government officials, hold the view that the country is not engulfed by a fiery economic crisis -- at least for now -- and is relatively well prepared for possible shocks.

But pessimists argue that there are plenty of signs that the country’s economy is already in deep trouble, citing two barometers, namely a widening trade deficit and a drop in foreign exchange reserves.

The country’s current account swung to deficit for the first time in four months in August, data showed Friday, suggesting that rising import bills outpaced slower-than-expected export growth.

During the January-August period, the cumulative current account figure stood at a surplus of $22.52 billion, but it marked less than half of the surplus the country posted a year earlier.

The shortfall illustrates the pernicious impact of high energy and commodity prices and supply chain tangles, as well as the losing momentum of exports. The on-year growth of exports slowed from 8.7 percent in July to 6.6 percent in August.

Although the Bank of Korea said the current account for September would likely return to the black, the figure for August was bad enough to consider devising steps to shore up the country’s economic fundamentals.

The forthcoming current account figure may not be encouraging, after all, given that South Korea posted a trade deficit for the sixth straight month in September, due to the same mix of greater import bills and a global slowdown.

It is also worrisome that the country is projected to post a record high trade deficit of nearly $50 billion this year, according to the Korea Economic Research Institute.

South Korea, which depends heavily on exports, confronts another problem: a gloomy outlook for semiconductor exports in the coming months. Samsung Electronics, the leading exporter of chips, saw its operating profit drop by more than 30 percent in the third quarter, sending shocks to both investors and analysts.

The precipitous fall of Samsung’s earnings reflects shrinking demand worldwide for chips in the face of a global slowdown. Some analysts predict that chip sales might suffer a deeper cut in the fourth quarter and beyond, as global tech heavyweights such as Apple and Google are slashing investment in step with the US Fed’s aggressive monetary tightening.

Given that semiconductors account for around 20 percent of the country’s total exports, slow chip exports appear to have played a role in dragging down the country’s trade figures.

Headwinds are expected to intensify further for Korea’s chipmakers, as the US is reconfiguring its supply chain networks in a bid to keep China at bay in the semiconductor-related sectors. Last week, the US administration unveiled a set of new regulations that limit China’s access to advanced semiconductors. The US controls on chip exports are feared to undercut Samsung and SK hynix, as the two companies run semiconductor production facilities in China.

Equally worrisome is the country’s foreign exchange reserves, which have been falling in recent months. The BOK said Thursday the foreign exchange stood at $416.77 billion in September, down from $436.43 billion a month earlier. The latest drop marked the biggest month-on-month fall since October 2008.

The drastic fall came as Korean authorities unloaded US currency holdings in a bid to hold back the Korean won from depreciating further against the dollar. On Friday, the local currency closed at 1,412.4 won against the dollar, marking an 18.5 percent decline this year. The weakening of the local currency is expected to continue as the US Fed keeps hiking interest rates to keep soaring inflation under control.

Given worsening trade data, dwindling foreign exchange reserves and the weakening of the local currency, economic policymakers are urged to scrutinize warning signs and devise extra measures, rather than offering the same sugarcoated assurances.