SEOUL– South Korea’s current account surplus narrowed in July from a year earlier due to an increased deficit in the services balance, central bank data showed Tuesday.
The country’s current account surplus reached US$7.26 billion in July, compared with a surplus of $8.41 billion a year earlier, according to the preliminary data from the Bank of Korea (BOK).
The figure represents the 65th straight month of the balance being in the black. The current account is the biggest measure of cross-border trade.
The BOK attributed the dip in the current account surplus to the widening deficit in the services sector.
The BOK said the services balance — which covers transport, travel, construction and costs for the use of intellectual property — logged a deficit of $3.29 billion in July, compared with a shortfall of $1.58 billion a year earlier.
A rise in overseas trips by South Koreans has also widened the travel balance deficit to $1.79 billion in July from a deficit of $1.28 billion a year earlier. The July figure marked the highest-ever travel balance deficit.
The number of outbound tourists hit a record high of 2.39 million in July, while foreign visitors to South Korea plunged 40.8 percent on-year to 1 million. Among foreign visitors, the number of Chinese travelers came to 281,000 in July, a drop of 69.3 percent from a year earlier.
Roh Chung-seak, director of the BOK’s monetary and financial statistics division, blamed the decline in Chinese tourists on a diplomatic row between South Korea and China over the deployment of an advanced U.S. missile defense system in South Korea.
China — South Korea’s largest trading partner — has imposed restrictions on South Korean imports and banned the sale of group tour packages to South Korea in retaliation.
Seoul and Washington said the Terminal High Altitude Area Defense system is only meant to counter North Korea’s evolving nuclear and missile threats. But China has repeatedly pressed South Korea to withdraw the missile system out of concern that the deployment could hurt Beijing’s security interests.
Roh also said geopolitical risks posed by North Korea’s missile and nuclear programs have also led to a decrease in the number of arrivals from Japan and European countries.
The primary income account surplus came to $580 million in July from a deficit of $50 million a year earlier.
Exports rose 11.4 percent on-year to $47.21 billion, with imports surging 15.2 percent to $36.5 billion.
Source: Yonhap News Agency