Korea’s current account surplus extends record surplus streak in Oct

2018.12.06 12:00:49 | 2018.12.06 14:11:54

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South Korea’s current account balance in October extended its record surplus streak to 80 months, helped by still solid semiconductor and petrochemical exports and improved inflow of Chinese and Japanese tourists.

The country’s current account balance totaled $9.19 billion in October, down from $10.8 billion in the previous month but up from $5.72 billion in the same month a year earlier, according to preliminary data released by the Bank of Korea (BOK) on Thursday. It has extended its surplus streak for the 80th month in a row, the longest run ever.

This was primarily driven by its goods account surplus, which reached $11 billion in October. Exports hit a record high of $57.2 billion, up 28.8 percent on year, thanks to brisk sales of semiconductors and petrochemical goods. Imports also rose 29.0 percent to $46.2 billion.

But the surplus streak may not last, with the two-year long semiconductor boom nearing an end and oil prices becoming more volatile.

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Service account deficit stood at $2.22 billion in October, narrowed from $2.52 billion the previous month and $3.53 billion from the year-ago period. This was largely due to the trimmed deficit in the travel account, which came in at $950 million, the smallest since November 2016. The BOK attributed this to the growing number of Chinese and Japanese visitors to Korea.

Koreans’ direct investment overseas expanded by $4.32 billion and foreign direct investment in Korea by $960 million.

As for securities investment, Koreans’ offshore investment has climbed every month since September 2015. It increased by $2.67 billion in October but the pace of growth has slowed from the previous month when it grew by $7.72 billion, as investors broadly retreated from global stock markets due to heightened U.S.-China trade tensions and anticipated interest rate hikes from the U.S. Federal Reserve. Foreign investors’ holdings in Korean securities fell by $4.08 billion, down for the second straight month amid soured investment sentiment.

By Lee Yu-sup and Kim Hyo-jin

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