Account surplus at $7.3 billion

Korea’s current account surplus continued in March, largely thanks to the ongoing strength of exports.

The surplus reached $7.3 billion last month, compared to $4.5 billion in February, the Bank of Korea reported yesterday. That brought the cumulative surplus for the first quarter to $15.1 billion, a 30 percent increase from the same period last year.

The current account has been on a surplus rally for 25 consecutive months since February 2012, when it posted a $2.4 billion deficit.

Most of that run can be attributed to the continuing growth of exports. Exports grew nearly 6 percent in March from a year earlier to $54.2 billion, compared to a 3.3 percent expansion of imports to $46.1 billion. The surplus in the goods account was $8 billion.

Automobiles, smartphones and other mobile devices were the drivers of last month’s export growth.

Telecommunication devices were the export pacesetters at 22.5 percent growth, followed by automobiles and shipbuilding at nearly 15 percent, computer chips at 13.6 percent, and electric and electronic products at 7.9 percent. Even steel, which had been struggling, saw exports increase 5.6 percent.

However, not all sectors shared in the growth. Displays fell nearly 10 percent compared to last year.

Whether this export-driven current account surplus will continue has been called into question by the sharp strengthening of the won.

The currency started the year at about 1,050 against the U.S. greenback and weakened to 1,080 won ($1.04). However, the continued purchasing of stocks by foreign investors as well as the nation’s ongoing current account surplus started to affect the won’s exchange rate.

The last time it was above 1,053.6 won was on April 9, and since then it has appreciated to the level of 1,030 won. Yet the central bank remains confident in the sustainability of exports.

“We expect the current surplus momentum to continue for April,” said a BOK official. “The current account surplus is moving within the expected course.”

Exports grew in advanced economies and emerging markets. Exports to the United States were up nearly 17 percent, followed by Europe at 15.1 percent. Even exports to Japan grew 1 percent. The only decline was in South America (minus 7.5 percent).

The service account saw its deficit shrink from $1 billion in February to $650 million in March.

While the situation in R&D and management consulting worsened, the logistics and distribution as well as travel accounts improved.

BY lee ho-jeong [ojlee82@joongang.co.kr]