Current account in surplus for record 39 months

Korea’s current account has set a record for the longest streak of monthly surpluses by registering in May its 39th consecutive month in the black.

The May surplus, as in other recent months, was largely due to a drop in the value of imports, especially of crude oil, which outweighed sluggish export performance. Exports in May continued to drop in value.

The Bank of Korea said Thursday the current account surplus for May was $8.65 billion, an increase of $510 million from April’s surplus.

The economy has shown a surplus on its current account every month since March 2012. This exceeds the previous record streak of 38 consecutive months that started in June 1986.

May’s exports, compared to those of a year ago, shrunk by 10.9 percent to $42.3 billion.

With the exception of telecommunications gear and computer chips, exports plummeted across the board.

Petroleum product exports fell 39.6 percent; shipbuilding tumbled 34.7 percent and home appliances were down 34.7 percent.

Steel and chemical products were down 18 percent and 17, percent respectively.

By export destination and calculating year-on-year, Korea saw the steepest decline in exports to Japan, by 13.5 percent, apparently due to the won’s strength against the Japanese yen. Exports to the Middle East sank 12.9 percent because of political instability in the region.

But the drop in the value of imports fell even more, resulting in the unprecedented record streak in surpluses.

Petroleum product imports dropped 52.4 percent year-on-year in value, and crude oil purchases fell 25.8 percent. Gas fuel imports were down 39.1 percent and steel imports declined 23.9 percent in value.

Imports of consumer goods climbed by 2.1 percent overall, led by a 27-percent surge in automobile imports. In the other direction, exports of Korean cars were off 9 percent.

Imports of some durable goods, such as furniture and television sets, rose in May, by 4.3 percent year-on-year. Grain imports also grew, by 2.0 percent.

Concerns are mounting in Korea, Asia’s fourth-largest economy, about what is being called a “recessionary surplus.” Economists here say the surplus is solid proof of sagging domestic demand.

BY KIMM HEE-JIN [kim.heejin@joongang.co.kr ]