South Korea’s current account surplus reached a four-month high in March as imports fell at a much faster clip than exports, data showed Monday, stoking concerns over upward pressure on its currency.
The current account surplus came to $10.39 billion in March, nearly double the $6.44 billion surplus from the previous month and marking the 37th consecutive month of surplus, according to the provisional data released by the Bank of Korea.
The current account is the broadest measure of cross-border trade.
The latest reading marks the highest level since the record $11.32 billion current account surplus in November last year. With the monthly result, Asia’s fourth-biggest economy is poised to break the current record surplus streak of 38 months, which began in June 1986.
The balance of goods reached $11.21 billion in March, soaring from a $7.32 billion surplus in the previous month as imports declined more sharply than exports.
Exports declined 8.4 percent on-year to $49.57 billion, slowing from a 15.4 percent drop in the previous month. Imports fell 16.8 percent to $38.36 billion, compared with a 21.9 percent on-year tumble in February.
“Trade of goods has been declining since the third quarter.
Overall, weak oil prices have sent both the amount of exports and imports lower,” said Jeon Seung-cheol, director general of the BOK’s economic statistics department.
“We’ve also seen a fall in exports of key products such as cars, home appliance products and display panels,” he added.
Slumping exports have been a bugbear for the South Korean economy heavily dependent on overseas shipments for its growth. In the first quarter, exports slumped 11.2 percent from a year earlier.
The service account, which includes outlays by South Koreans on overseas trips, narrowed its deficit to $967.2 million in March from the previous month’s $2.06 billion.
The primary income account surplus, which tracks the wages of foreign workers and dividend payments overseas, fell to $528.8 million from February’s $1.4 billion surplus on increased dividend payments, according to the data.
In the first three months of this year, South Korea posted a cumulative current account surplus of $23.42 billion, compared with the $15.19 billion surplus a year earlier. The first-quarter surplus is roughly 24 percent of the central bank’s $96 billion current account surplus target for this year.
South Korea’s streak of current account surplus has sparked concern that it may cause its currency to strengthen against the U.S. dollar, eroding the price competitiveness of the country’s exports. (Yonhap)
