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Current account surplus continues

Korea is in the black for the 80th month as tourism picks up

Dec 07,2018
Korea’s current account remained in the black for the 80th consecutive month in October, backed by robust exports and reduced losses in services thanks to a growing number of in-bound tourists.

October’s current account surplus reached $9.19 billion, up 60.7 percent from $5.72 billion a year earlier, according to preliminary data released by the Bank of Korea (BOK) on Thursday.

But when compared with the previous month, the figure declined 15 percent.

The big yearly gain is linked with increased business days compared to the same month last year and stellar performance in machinery and petrochemical exports.

“This year, the Chuseok holiday moved from October to September, which allowed for more working days than last year,” a source at the BOK said.

“Exports also registered sound numbers, especially in machinery and petrochemical products.”

As noted, exports rose 28.8 percent to $57.24 billion, marking an all-time high.

Imports also jumped up 29 percent to $46.24 billion, buoyed by additional working days and rising oil prices.

The goods trade surplus posted $11 billion, up 27.9 percent from a year earlier.

Another notable point came from the services trade, which measures travel, transport and construction balances. The services account has been struggling in recent months due primarily to the declining number of tourists visiting Korea.

But the service account deficit reduced in October with a rise in spending by inbound tourists.

“The number of Chinese tourists started rebounding and more Japanese people visited Korea with easing inter-Korean relations,” said Roh Chung-seak, a director at the bank’s economic statistics division.

The number of Chinese visitors soared 37.6 percent to around 475,000 in October on year, while that of Japanese tourists rose 61.7 percent to 290,000.

With services, the travel account, which measures the amount of money generated from tourism, posted the lowest deficit since November 2016 at $950 million.

That translated into narrowing the service account deficit to $2.22 billion, down 37 percent over a year ago.

As for financial accounts, there was an outflow increase of $4.32 billion from domestic investors compared with the previous month’s $2.47 billion.

On the other hand, foreign investment saw an increase of $960 million compared with the previous month’s $300 million.

Derivatives saw a net inflow of $770 million in October.

Exports to big trading partners such as China and the United States remained solid, while those to the Middle East took a downturn.

Outbound shipments to China increased 17.6 percent to $14.8 billion, while those to the United States expanded 47.6 percent to $6.98 billion.


BY PARK EUN-JEE [park.eunjee@joongang.co.kr]


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