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According to the Bank of Korea on the 7th, it is the first time since January-February 2012 that the current account has decreased for two consecutive months. The deficit for the two months was $8.62 billion, nearly double the $4.87 billion 11 years ago. Recently, the current account turned to a surplus of 2.68 billion dollars in December after a deficit of 220 million dollars in November last year, but the deficit continues this year.
The goods balance recorded a deficit of 1.3 billion dollars. Although the deficit narrowed from last January (-7.32 billion dollars), it is a deficit for five consecutive months. Compared to February last year (a surplus of $4.35 billion), it plunged by $5.65 billion. Exports decreased by 6.3% from $53.9 billion to $50.52 billion, while imports increased by 4.6% from $49.55 billion to $51.82 billion.
The service balance recorded a deficit of $2.03 billion. It has been in the red for 10 consecutive months since May last year. The deficit in the service account was greatly affected by the deficit in the travel account (-1.01 billion dollars). Following a deficit of $1.13 billion in December last year and $1.49 billion in January last year, it posted a deficit of more than $1 billion for three consecutive months. While the number of overseas travelers is rapidly increasing, the fact that the influx of tourists, including Chinese, has not recovered, is cited as the background for the deficit in the travel account.
The transportation balance recorded a deficit of 220 million dollars. It turned to a loss, down by $1.64 billion from the same month last year. As export freight rates showed a downward trend, transportation income decreased significantly. Although the primary income balance, including dividend income, increased by $1.56 billion from a year ago to a surplus of $3.12 billion, it was not enough to prevent the current account from deteriorating.
In its economic outlook last month, the Bank of Korea predicted that the current account would record a deficit of 4.4 billion dollars in the first half of this year, but a surplus of 26 billion dollars would be possible for the year.
The financial account capital account recorded an increase of $1.19 billion in net assets. Although net assets decreased from a decrease in the previous month to an increase, compared to $7.71 billion in February last year, the rate of increase in assets decreased significantly. As for direct investment, domestic foreign investment (assets) increased by $3.66 billion, and foreign domestic investment (debt) increased by $360 million. Overseas stock investment (assets) increased by $2.48 billion, and foreign domestic stock investment (debt) increased by $1.45 billion.
Reporter Jinkyu Kang [email protected]
