Korea’s current account returns to surplus in September

[Provided by Maekyung Media Group]

South Korea’s current account balance returned to a surplus in September on improvement in goods account, but with the black figure off by nearly $9 billion from a year-ago period due to expensive imports and weaker currency.

The Bank of Korea said Tuesday that the September current account generated a surplus of $1.6 billion, compared with a $3.05 billion deficit in the previous month. Against a year ago, the gain is a digit smaller, losing as much as $.8.9 billion from $10.5 billion.

The cumulative surplus as of September stopped at $24.1 billion, off $43.3 billion from the same period last year due to the steady fall in exports and rise in import value.

The country’s current account dipped to a deficit in April on surging imports, snapping its surplus streak of 23 months. It managed to return to the black in the following month but slipped back to a deficit in August.

The improvement in the current account is largely owed to a rebound in goods balance, which was $490 million in surplus. Although the goods account managed to return to the black in three months, its surplus is $9.06 billion smaller than a year ago.

Exports fell 0.7 percent on year to $57.09 billion to mark its first fall in 23 months. Shipments to China decreased by 6.5 percent, to Southeast Asia 3.0 percent and to the European Union 0.7 percent.

Imports jumped 18 percent on year to $56.59 billion on higher energy costs.

Import prices of commodities climbed 25.3 percent on year. Gas import price surged 165.1 percent, crude oil 57.4 percent, and coal 32.9 percent.

Capital goods imports rose 10.6 percent, with imports of transportation equipment rising 23.7 percent and semiconductor 19.2 percent. Consumer goods imports grew 13.0 percent, mainly led by grain and automobiles, which jumped 38.1 percent and 24.2 percent, respectively.

Service account remained in the red, widening by $280 million on year to $340 million.

Transportation account managed to stay in the black with a surplus of $1.18 billion but it is $720 million less versus a year ago in line with the fall in shipping costs. The Shanghai Containerized Freight Index, the global benchmark in short-term shipping rates, dipped 48.9 percent in September from a year earlier.

Travel account deficit rose to $540 million from $480 million as more Koreans traveled abroad amid easing in Covid-19 travel restrictions.

The country’s primary income account surplus reached $1.84 billion, gaining by $710 million in a year.

Net assets in the financial account increased $4.59 billion in September.

Direct overseas investment by Koreans soared by $4.78 billion and foreign direct investment in Korea by $470 million. Koreans’ overseas investment in securities decreased $500 million but foreigners’ securities investment in Korea surged by $1.49 billion.

By Cho Jeehyun