South Korea’s current account surplus reached an 11-month high in March, despite falling exports due to the novel coronavirus pandemic as the service account deficit sharply declined, data showed Thursday.
According to preliminary data from the Bank of Korea, the nation’s current account surplus hit a record high of $6.23 billion in March, up $1.19 billion from a year earlier.
The current account refers to the difference between the value of exports and imports. Composed of factors including goods and services, the current account surplus indicates a country is exporting a greater value than it is importing.
The upturn of Korea’s current account surplus came even though its goods account surplus dropped to $7 billion in the same period from $8.7 billion a year earlier. The country saw its exports drop 3.3 percent on-year to $46.4 billion in March on a customs clearance basis, and imports fell 0.6 percent to $39.4 billion, the BOK said.
“The drop in exports was largely due to a drop in exports to China (under impact by) the COVID-19 outbreak as well as weaker shipment prices of semiconductors and petroleum goods,” said Park Yang-su, head of the BOK’s economic statistics department.
The central bank attributed the growth in the current account surplus to the improvement in the service account deficit.
The service account deficit slightly narrowed to $1.46 billion from $2.1 billion in March last year, driven by a reduction in intellectual property account deficit, which slipped to $550 million from $950 million a year earlier.
The BOK noted the recent 11-month surplus streak would turn to a deficit in April, considering the country’s exports that continued to tumble in recent months.
Earlier, the nation’s trade balance in April swung to its first deficit in 99 months due to an exports slump amid the decline in global demand, plunging by 24.3 percent from the previous year, industry data showed.
Meanwhile, the travel account deficit jumped to $370 million from $170 million in March, as the number of foreign visitors to South Korea fell slightly faster than that of outbound tourists, which came to 94.6 percent and 93.9 percent, respectively.
The country’s primary income account recorded a $930 million surplus, marking a turnaround from the $610 million deficit in March 2019.
By Choi Jae-hee (firstname.lastname@example.org