S. Korea posts current account surplus for 2nd straight month but sharply smaller than year earlier

SEOUL– South Korea posted a current account surplus for the second consecutive month in October, but the amount was much smaller than the previous year amid expanded imports and outbound travel, central bank data showed Friday.

The country’s current account surplus came to US$880 million in October, according to the preliminary data from the Bank of Korea (BOK).

This marked the second straight month of a surplus, though the surplus was nearly halved from the previous month’s $1.58 billion. It also represented a sharp fall from a year earlier when the country logged a surplus of $8.01 billion.

The decline came as import bills grew fast amid high-rise costs of raw materials, while outbound travel increased, bolstered by eased COVID-19 restrictions.

During the January-October period, the country’s cumulative current account surplus stood at $24.99 billion, sharply down from a surplus of $75.42 billion tallied a year earlier, the data showed.

South Korea exported $52.59 billion worth of exports in October, down 6 percent from a year earlier. The decline stemmed in part from a 16.4 percent drop in outbound shipments of semiconductors.

Exports to China, in particular, shrank 15.7 percent on-year in October as Beijing’s strict antivirus measures hamper access to major markets.

Imports, meanwhile, jumped 8.5 percent on-year to $54.07 billion in the month. Excluding energy products, imports grew 3.1 percent over the same period.

The goods balance that tracks exports and imports logged a deficit of $1.48 billion in October, swinging back from the previous month’s surplus of $470 million. It compared with the previous year’s surplus of $6.1 billion.

The service account, which includes outlays by South Koreans on overseas trips and transport earnings, posted a surplus of $50 million in October, a turnaround from a deficit of $340 million a month earlier. It was still smaller than a surplus of $640 million a year earlier.

The on-year decline stemmed from a decline in transportation-related surplus and increased outbound trips that led to a deficit of $540 million in the travel sector, one of the major components for the service account.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, logged a surplus of $2.26 billion in October, down from the previous month’s surplus of $1.84 billion, according to the data.

Source: Yonhap News Agency

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