Korea’s current account returns to surplus in March

[Photo by Yonhap]

South Korea’s current account balance returned to a surplus in March after two consecutive months of deficit, helped by dividend payments from overseas amid weak export numbers, central bank data showed Wednesday.

According to preliminary data released by the Bank of Korea (BOK), the country’s current account surplus reached $270 million in March, compared to a shortfall of $520 million in February and a record deficit of $4.21 billion in January.

The current account deficit for the January-March period was $4.46 billion, down by $19.34 billion from a year ago.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, reached $3.65 billion in March, up $2.61 billion from a year ago. The increase was largely driven by a $2.86 billion increase in dividend payments from overseas.

The country logged a goods account deficit of $1.13 billion in March, the fifth straight shortfall, the BOK data showed. However, the deficit narrowed from a record $7.32 billion in January and $1.3 billion in February.

Exports shrank 12.6 percent on-year to $56.4 billion in March due to weak demand for semiconductors, chemicals, and steel products. Shipments to China and Southeast Asian countries plunged 33.4 percent and 23.5 percent, respectively, over the same period.

Imports, meanwhile, declined 2.5 percent in March to $57.52 billion. Imports of raw materials were 10 percent lower than the same month last year.

Korea also posted a service account shortfall of $1.9 billion, the 11th straight month of a decline, due to increased overseas travel amid eased pandemic curbs.