Korea's Oct C/A surplus in black for 18th mo, likely meet annual target of $92 bn

[Photo by MK DB]

South Korea is expected to deliver a current-account surplus close to targeted $92 billion this year as it was able to maintain surplus for the 18th consecutive month in October as bulging shipping revenue helped to offset surge in import cost from strong commodity prices, data showed Tuesday.

The country’s current account in October showed a surplus of $6.95 billion in October, keeping the black streak for the 18th straight month since May last year.

The surplus narrowed from $11.5 billion in the same month a year ago and $10.07 billion in the previous month as imports rose sharper than exports from higher fuel and commodity cost.

The goods account posted a surplus of $5.64 billion, compared with $4.53 billion from a year ago due to a rise in goods imports driven by higher oil and raw material prices. Exports added 20.1 percent to $55.97 billion in October, while imports grew at a faster clip of 38.2 percent to $50.34 billion.

The import price of crude oil in October averaged $77.8 per barrel, up 80 percent from a year ago period, and natural gas import price 142.2 percent higher at $668 per ton.

The cumulative surplus in the January-October period came to $77.07 billion, on path to meet or exceed the Bank of Korea’s estimate of $92 billion.

The surplus owed greatly to improvement in the services account.

The services account recorded a surplus of $630 million, turning around from a deficit of $830 million a year ago.

Transportation account registered a record-high surplus of $2.22 billion, up sharply from a surplus of $480 million last year thanks to the strong global cargo demand.

The Shanghai Containerized Freight Index (SCFI), widely cited metric on market freight quotations, soared 212.6 percent in October on year, helping to deliver highest-ever cargo shipping revenue of $4.77 billion.

The travel account deficit, however, widened from $400 million a year prior to $450 million.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, posted a surplus of $670 million, down $1.83 billion last year, due to a deficit in dividend income account of $30 million versus $1.57 billion in black a year ago.

Net assets in financial account increased $7.01 billion in October.

Direct investment of Koreans overseas added $7.72 billion to hit a monthly high while that of foreigners in Korea totaled $3 billion. In securities investment, Koreans’ investment gained $940 million and foreigners’ $3.92 billion.

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