South Korea’s monthly current account surplus narrowed in April from a four-month high in the previous month but continued to extend its surplus streak to a 38th straight month, data showed Tuesday.
The current account surplus reached $8.14 billion last month, down from a $10.43 billion surplus in March, according to the provisional data released by the Bank of Korea. The current account is the broadest measure of cross-border trade.
The on-month decline was largely attributed to the primary income account, which shifted to a record $2.8 billion deficit from a $528.8 million surplus on an increase in dividend payments by companies that close their books in December.
The balance of goods reached a record $12.56 billion, up from $11.25 billion a month earlier, climbing for a third straight month as imports contracted at a much faster clip than exports.
Exports fell 11.2 percent on-year, accelerating from a 8.5 percent drop in the previous month. Imports plunged 17.9 percent, slightly quickening from a 17.1 percent fall in March.
“The decline in exports is due to a number of factors, including a fall in global oil prices, as well as a decline in oil product shipments stemming from regular maintenance works at major facilities,” said Park Seung-hwan, head of the BOK’s Monetary and Financial Statistics Division.
Park also mentioned longer-term structural changes, such as narrowing technological gaps with other exporter economies like China, reiterating BOK Gov. Lee Ju-yeol’s stance on changing trade circumstances.
In a May 15 press briefing, the BOK head stressed the need to beef up efforts to resolve structural issues, saying, “Exports have somewhat been hit by a changing economic structure and growth patterns in China.”
The service account, which includes outlays by South Koreans on overseas trips, logged a deficit of $1.13 billion, widening from a $967 million deficit in the previous month, the data showed.
In the first four months of the year, South Korea posted a cumulative current account surplus of $31.59 billion, compared with $22.35 billion a year earlier. The central bank earlier projected a $96 billion current account surplus for this year.
The monthly data comes as the country’s continued surplus streak has spurred concerns that it may cause the won to strengthen against the greenback, eroding the price competitive of exporters like Hyundai Motor Co., which are already facing hurdles from a weak yen. (Yonhap)
