South Korea’s current account surplus rose to an eight-month high in June as the pace of export decline eased and the gaping service deficit improved on reduced overseas travels.

Korea reported a current account surplus of $6.88 billion in June, up from $2.29 billion in the previous month, the Bank of Korea data showed Thursday. This was the biggest surplus since October 2019 when it reached $7.83 billion.

The June figure also marked the second straight month of surplus following a devastating $3.33 billion deficit in April, the country’s biggest plunge into the red in almost a decade.

But first-half surplus was the smallest in eight years as the coronavirus pandemic hammered exports, taking a toll on the trade-dependent economy. For the January-June period, the current account surplus totaled $19.17 billion, the smallest since the first half of 2012.

The goods account balance was $5.87 billion in June, more than doubled from the previous month’s $2.5 billion but narrowed from $6.27 billion a year earlier.

Exports, responsible for more than half of South Korea`s economy, dipped 9.3 percent on year to $40 billion. Imports fell 9.8 percent to $34.2 billion. Both exports and imports extended their on-year decline for the fourth straight month.

The pace of export decline, however, significantly slowed from the 28.2 percent plunge in May, as shipments to China gained ground despite softening prices of Korea’s mainstay exports, including semiconductors and chemical products.

The service account deficit narrowed to $1.26 billion in June from $2.14 billion a year ago, as overseas travel came to a virtual halt due to coronavirus-triggered border restrictions.

The primary income account surplus in June was $1.74 billion, down from $2.07 billion a year earlier on reduced dividend income. Net financial assets, which measures net asset inflows, gained $7.15 billion.

Korea’s direct investment overseas rose $3.03 billion while foreign direct investment at home climbed $670 million. On the securities front, Korea’s investment abroad gained $4.76 billion while foreign investment in Korea added $4.26 billion.

By Kim Hyo-jin

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