South Korea’s current account surplus hit a nine-month high in July as imports declined more than exports due to subdued local demand from the protracted COVID-19 impact.

According to data released by the Bank of Korea on Friday, the country’s current account surplus came to $7.45 billion in July, up from $6.88 billion in June and $6.58 billion in the same month a year ago. It was the biggest surplus in nine months since $7.8 billion in October, 2019.

In the January-July period, however, Korea’s current account surplus reached $26.6 billion, narrowing from $29.2 billion in the same period a year ago.

The goods account balance surplus widened to $6.97 billion in July from $5.87 billion in the previous month and $6.18 billion in the same month last year. The surplus widened after imports contracted more than exports.

Exports, which represent more than half of Korea’s economy, fell 10.8 percent year over year to $43.2 billion in July. Outbound shipments of petrochemical products, automobile components fell, whereas those of information technology devices and semiconductors rose.

By country, exports to China where the COVID-19 outbreaks have been mostly contained increased for a second straight month while those to the United States also rose both on year and on month.

A decline in imports, however, was steeper than that of exports, falling 14.2 percent on year to $36.2 billion in July. Imports of capital goods increased 7.2 percent, whereas those of raw materials and consumer goods fell 25.6 percent and 7.6 percent, respectively due to still subdued local consumption amid the lingering virus concerns.

The services account deficit narrowed to $1.1 billion in July from $1.26 billion in June and $1.55 billion in July last year on improved travel account as Koreans’ overseas travel practically came to a standstill due to the coronavirus pandemic.

The primary income account surplus in July narrowed from $2.47 billion a year ago to $1.95 on reduced income on equity. The secondary income account reported a $370 million deficit.

Net financial asset, which measures net asset flows, gained $9.59 billion in July.

Korea’s direct investment overseas increased $3.15 billion while foreign direct investment at home rose $830 million, data showed. Korea’s securities investment abroad gained $4.67 billion while foreign investment in Korea added $5.08 billion.

By Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]