South Korea’s service account deficit in 2017 widened to its largest due to the sharp fall in Chinese visitors amid the diplomatic row between Seoul and Beijing over Korea’s deployment of a U.S. anti-missile battery.
But the current account surplus extended its 20-year-long winning streak last year thanks to robust exports amid the global economic recovery.
According to preliminary data released by the Bank of Korea on Monday, the nation’s service account deficit widened to a record high of $34.47 billion, breaking records for three consecutive years from $14.92 billion in 2015 and $17.74 billion in 2016.
The record-high service account deficit owed to the travel deficit that expanded to $17.17 billion last year. Korean outbound travelers rose 18.4 percent from a year ago, while foreign visitors to Korea dropped 22.7 percent with Chinese visitors declining 48.3 percent following Beijing’s ban on group tour to Korea in its retaliation against Seoul’s host of a U.S.-backed Terminal High Altitude Area Defense (THAAD) anti-missile battery. As the two countries late last year agreed to mend their ties, the number of Chinese tourists to Korea is expected to recover this year.
Despite the huge deficit in service account, the country’s current account surplus last year amounted to $78.46 billion, extending the surplus streak for the 20th straight year since 1998.
Goods account surplus came at $119.89 billion, the second largest from $122.27 billion in 2015, driven by the brisk exports thanks to the global economic recovery and strong chip market. Exports gained 12.8 percent from a year earlier to $577.38 billion last year. Imports reached $457.49 billion, up 16.4 percent.
By Kim In-oh and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]