Current account surplus hits an all-time record
Although last month’s current account surplus shrunk compared to the same period last year, as exports saw a sharper drop than imports, the surplus for the first 11 months amounted to $64.3 billion, exceeding the $63 billion that the central bank had projected for the entire year.
And the surplus far outstripped the previous record set in 2012, $48 billion.
Although the accumulated surplus in the current account has been reaching new heights, the monthly current account surplus has been wobbly, raising concerns that the economy’s growth might be derailed, especially with the weakness of the Japanese currency threatening Korea’s competitiveness in the global market as the U.S. central bank starts reducing its stimulus program.
The current account surplus in November was $6 billion. This was a sharp drop from the previous month’s $9.5 billion. Still, the current account has registered surpluses for the longest stretch ever, 22 months.
The goods account surplus, which is the difference between exports and imports, fell not only compared to a year ago but also compared to the previous month
The goods account surplus last month was $6.2 billion, smaller than the $7.1 billion reported a year ago as well as the $7 billion reported in October.
The biggest reason was because exports saw a sharper drop than imports. Exports fell nearly 2 percent to $48.8 billion while imports dipped 0.2 percent on-year to $42.6 billion.
Exports in the shipbuilding industry saw a significant increase as orders rolled in, growing 31.6 percent on-year. Semiconductor exports also grew last month, increasing 8.2 percent on-year.
But exports of steel plummeted 17 percent on-year as they have been losing competition in the global market against rival Japan, whose products now have the upper hands thanks to its weak currency against the U.S. greenback.
Exports to advanced economies continued to grow last month while those in the emerging markets continued to struggle.
Exports to Europe saw the biggest on-year increase of 6.6 percent, followed by China’s 3.7 percent. Exports to the U.S., which saw a significant increase in October, slowed a bit, expanding 2.8 percent.
On the contrary, exports to Southeast Asian markets continued to fall nearly 12 percent on-year last month. Exports to the Middle East fell more than 10 percent while exports to South America went down 5.6 percent on-year.
Yet the central bank was confident that the current situation is only temporary.
“Exports this month are showing strong growth,” said Jang Young-taek, a BOK official.
The central bank will be announcing its economic outlook for 2014 early next month.
BY LEE HO-JEONG [firstname.lastname@example.org]
with the Korea JoongAng Daily
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