Current account surplus continuesThe country’s current account balance in August posted its 54th straight surplus, continuing the longest streak of the balance being in the black, the Bank of Korea revealed Tuesday.
However, the size of the surplus, $5.51 billion, represents a 36 percent decrease from July. It’s the second consecutive month that the current account surplus has contracted.
The figure has been shrinking recently as Korea’s exports have been declining since last year. Exports in August fell 3 percent compared to a year ago to $41.7 billion. After the labor union of the nation’s largest automaker, Hyundai Motor, began intermittent walkouts in mid-July, exports of Korean automobiles shrank 14.6 percent year on year to $2 billion.
Imports, on the other hand, grew 0.6 percent year on year to $34.4 billion. Although the goods account was still able to post a surplus with exports outnumbering imports, this was the first time since September 2014 that imports increased year on year.
“The impact of falling crude prices on imports has been reduced, while inbound shipments, particularly in machinery, have increased,” a central bank official said on the reason why imports went up in August.
As a result, the balance on the goods account in August was $7.3 billion, a 32 percent decline from $10.8 billion in July.
One notable figure in the Bank of Korea report was the travels account, which posted a $1.28 billion deficit, nearly the same as July’s deficit. This suggests more Koreans are traveling abroad than spending their vacation in domestic locales, as spending by Koreans overseas reached a record high of $2.82 billion.
The Bank of Korea’s governor, Lee Ju-yeol, hinted at the possibility of readjusting the nation’s economic outlook, including the low inflation rate, during a legislative audit held at the bank’s headquarters in central Seoul on Tuesday.
Lee said he expects inflation this year to settle at 1 percent, 0.1 percentage point lower than the forecast the central bank made in July.
“Lower energy bills as a result of low crude prices have had an effect [on our inflation forecast],” Lee said.
BY LEE HO-JEONG [firstname.lastname@example.org]