South Korea’s current-account surplus shriveled nearly 15 percent on year in June and 25 percent for the first six months to eke out the smallest black figure in seven years due to sharp slump in exports.
According to data released by the Bank of Korea on Tuesday, the nation’s current account registered $6.38 billion in surplus in June, down 14.5 percent on year. The central bank attributed the drop to the decline in goods account surplus from $9.54 billion to $6.27 billion over the same period. The bigger 15.9 percent fall in exports from $52.31 billion to $43.99 billion than the 11.8 percent dip in imports dragged down the surplus in goods account, according to the BOK.
For the first six months of this year, the surplus in the nation’s current account balance slipped 24.7 percent from the same period last year to $21.77 billion, the smallest in seven years since the first half of 2012 when the figure totaled $9.65 billion in the aftermath of the European fiscal crisis. The balance has maintained the black figures over the period excluding April when it recorded the first deficit of $660 million in seven years due to the seasonal increase in stock dividend payouts.
The country’s exports are showing no signs of recovery due to the escalating trade disputes between the United States and China and prolonged slump in chip prices. In June, the outbound shipments extended the losing streak for seven consecutive months to $44.18 billion, down 13.5 percent from a year ago. The exports fell 9.8 percent on year to $277.7 billion from January to June, the first drop in 30 months.
Service account deficit in June narrowed from the previous month to $2.09 billion. The surplus in the primary income account grew to $2.77 billion while the transfer income balance posted a deficit of $570 million. For the first six months, the service account recorded the smallest deficit since the second half in 2016 to $12.35 billion.
In the financial account, net assets rose by $6.52 billion in June. Koreans’ overseas investment grew by $3.04 billion and those made by foreign investors in Korea also increased by $1.58 billion. Koreans’ overseas securities investment gained $8.6 billion and those by offshore investors in Korea expanded $9.51 billion.
By Kim Yeon-joo and Choi Mira
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