South Korea sustained a surplus streak in its current account for the 15th month in a row in July driven by a sharp recovery in transportation account on a surge in international freight rate and a rise in dividend income from overseas investment, central bank data showed Tuesday.
The country’s current account surplus came to $8.21 billion in July, adding $1.19 billion from the same period a year ago.
At this rate, the Bank of Korea projected Asia’s fourth largest economy would post a current account surplus of over $80 billion for full 2021, up from $75.3 billion last year.
The goods account stood at $5.73 billion in July, down $1.29 billion from a year ago.
Exports jumped 26.3 percent on year to $54.31 billion, gaining for the 9th straight month, while imports 35 percent to $48.58 billion. Imports rose faster than exports for the second month in a row.
The increase rate in exports would actually be greater if not for the jump in the value of imported fuel against a year-ago period, the BOK added.
The services account registered a deficit of $80 million in July, narrowing by $1.22 billion from a year ago on transportation surplus of record $1.59 billion in July, up steeply from $10 million a year ago. The surplus has been touching new peaks for three straight months. The Shanghai Containerized Freight Index surged 284.5 percent in July, leading to a sharp increase in ocean freight transportation income.
According to the BOK, the sea freight index stood at 3,713 in June 2016 before soaring to 4,038 in July this year. The index is estimated at 4,308 for August.
Travel account registered a deficit of $490 million in July, widening from $330 million loss a year ago on improved overseas credit card spending.
The primary income account, which tracks wages of foreign workers and dividend payments overseas, showed a surplus of $2.8 billion in July, up $1.12 billion from a year ago, on dividend income growth.
Dividend income account registered a surplus of $2.06 billion in July, up from $800 million a year ago, on increased dividend income of local institutional investors.
Net assets in financial account increased by $6.56 billion in July.
Direct investment of Koreans overseas gained $3.49 billion while that of foreigners in Korea $2.95 billion. In securities investment, Koreans’ investment gained $4.67 billion and foreigners’ $8.1 billion.
By Lee Eun-joo
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]