South Korea’s current account surplus narrowed 13.6 percent from a year earlier as its travel account deficit widened to a record high on a sharp fall in the number of Chinese tourists amid the lingering diplomatic spat over Seoul’s host of a U.S. missile shield.
According to preliminary balance of payments data released by the Bank of Korea on Tuesday, the nation’s current account surplus rose to $7.26 billion in July from $7.01 billion in the previous month, extending its longest-ever surplus streak to the 65th consecutive month, but contracted from $8.41 billion in the same month a year earlier.
The on-year fall in the country’s July current account surplus was mainly driven by the plunge in the services account balance. The deficit in services account nearly doubled to $3.29 billion from $1.58 billion a year earlier, and it is the second largest services account deficit following the historic high of $3.36 billion recorded in January this year.
According to BOK data, the deficit in services account has widened mainly due to the downward spiral in travel account. The nation’s travel account deficit stretched to a new record high of $1.79 billion in July as the number of Koreans travelling abroad hit a historic high while Chinese tourists continued to avoid their visit to Korea following Beijing’s bans on its people’s group tours to the neighboring nation in retaliation against Seoul’s deployment of U.S missile defense launchers. Chinese tourists had made up the lion’s share of foreign tourists to Korea before the diplomatic row between the two countries began earlier this year.
The previous historic high in travel account deficit was $1.65 billion recorded in July 2008, right before the global financial crisis.
Goods account surplus in July jumped to $10.71 billion from $9.71 billion a month ago and $10.67 billion a year ago, thanks to strong demand in semiconductors and ships as well as a rise in the selling price for petrochemical and steel products.
Exports rose 11.4 percent on year to $47.21 billion, extending a winning streak for the ninth consecutive month. Imports also grew 15.2 percent on year to $36.5 billion.
By Chun Jung-hong
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]