Korea’s current account surplus shrinks nearly 90% as goods account in red

[Photo by Yonhap]

South Korea extended its current account surplus for the second straight month in October but was down almost 90 percent from a year ago because of a deficit in its goods account.

Asia’s fourth-largest economy posted a current account surplus of $880 million in October, falling from $1.58 billion in the previous month and $8.01 billion against a year-ago, according to the Bank of Korea Friday. In the first nine months of this year, the figure reached $24.99 billion, falling from $50.43 billion a year earlier.

The goods account in October posted a deficit of $1.48 billion, reversing from a surplus of $6.1 billion a year ago. Exports dipped 6 percent from a year earlier to $52.59 billion as shipment of semiconductors dropped 16.4 percent and chemical industrial goods fell 13.4 percent. Exports to China was down 15.7 percent and those to Japan was 13.1 percent lower.

Imports, however, expanded 8.5 percent on year to $54.07 billion. Imports of gas jumped 79.8 percent, coal was up 40.2 percent, and crude climbed 24.2 percent. Import of capital goods increased 10.9 percent and consumer goods rose 7.9 percent.

The service account surplus in October contracted to $50 million from $640 million a year earlier. Transportation account had a surplus of $1.38 billion but was significantly lower by $504 million on year. Travel account deficit widened to $540 million from $460 million shortfall a year earlier.

The primary income account, which tracks wages of foreign workers and overseas dividend payments, recorded a surplus of $2.26 billion, up $1 billion from a year ago due to a $1.03 billion increase in dividend income.