Korea’s current account surplus extends for 2nd month in June

[Photo by Yonhap]

South Korea’s current account managed to extend its positive streak for the second month in June as imports fell greater than exports and dividend payments overseas rose.

According to data released by the Bank of Korea on Tuesday, the country’s current account surplus stood at $5.87 billion in June, maintaining the surplus streak for the second month in a row after a surplus of $1.93 billion in May. In April, the country’s current account deficit stood at $790 million.

The cumulative current account surplus for the first six months of this year, however, came to $2.44 billion, down 90 percent from $24.9 billion in the same period a year ago.

The goods account recorded a surplus of $3.98 billion in June, keeping the surplus trend for the third month.

Exports fell 9.3 percent on year to $54.1 billion in June, declining for the 10th month in a row.

Exports of petroleum products plunged 40.5 percent in June from a year ago, chips 28 percent, chemical engineering products 12.8 percent, and steel products 3.2 percent.

Exports to China fell 19 percent, Southeast Asia 17.9 percent, Japan 3.7 percent, and the U.S. 1.8 percent.

Outbound shipments of passenger vehicles, on the other hand, rose 60.7 percent.

Imports declined 10.2 percent to $50.15 billion in June from a year ago, outpacing exports in both volume and decline rate.

Imports of raw materials fell 18.5 percent in June from a year ago due to lower energy import prices. Imports of coal fell 45.3 percent, crude oil 28.6 percent, and petroleum products 19.7 percent.

Imports of capital goods also fell 9.1 percent as chips dropped 19.2 percent and chip manufacturing equipment 0.4 percent, but those of consumer goods rose 6.8 percent led by passenger vehicles that jumped 75 percent.

The services account posted a deficit of $2.61 billion in June, widening sharply from $590 million in the same month a year ago and $910 million a month ago.

The travel account registered a deficit of $1.28 billion, nearly double that of $650 million a year ago amid the easing of Covid-19 restrictions.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, registered a surplus of $4.85 billion in June, up from $1.42 billion in May and $3.08 billion in the same period last year. The surplus was driven by higher dividends from foreign subsidiaries.

Net assets in the financial account gained $4.77 billion in June.

Direct investment of Koreans overseas fell by $1.72 billion while that of foreigners in Korea rose by $2.56 billion.

In securities investment, Koreans’ investment overseas gained $6.12 billion and foreigners’ investment in Korea $3.65 billion.