China’s ban on tours takes a toll on first half statisticsKorea recorded its highest deficit in its services balance in the first half of this year as a result of the curbing of Chinese tour packages to Korea as part of Beijing’s retaliation for Seoul’s deployment of the Terminal High Altitude Area Defense missile shield.
The Bank of Korea said on Thursday the services deficit widened in the first six months to $15.7 billion, up 37.9 percent from $9.7 billion in the second half of last year.
Still, the country’s overall current account surplus was $7.01 billion in June, the 64th consecutive monthly surplus. The size of the surplus, however, was 42 percent lower than in the same period last year, according to preliminary data from the central bank.
The worst services balance was caused by the travel and logistics segments, the Bank of Korea said.
“The worsening travel and logistics balances led into the increased services deficit,” said Chung Kyu-il, director general of the Economic Statistics Department at the Bank of Korea.
“While the number of Chinese tourists drastically declined, that of outbound travelers increased,” he said.
Chinese arrivals fell 41 percent in the first half to 2.3 million from 3.8 million in the same period last year, according to the Korea Tourism Organization.
The number of outbound tourists in Korea increased 18 percent from a year earlier to more than 2.09 million in June, while foreign tourists coming to Korea fell 36.2 percent to 992,000.
The Chinese government banned travel agencies from sending tourists to Korea starting this year to punish Korea for its decision to deploy the U.S. antimissile system.
The travel account deficit, which accounts for a lion’s share of the services balance, stood at 1.4 billion won ($1.2 million) in June and 7.7 billion won in the first six months. The June figure was the highest in 23 months since July 2015, when the country was hit by an outbreak of Middle East respiratory syndrome.
As for the logistics account, the deficit expanded to $470 million in June, the third highest since records have been kept in their current form.
The central bank blamed the collapse of Hanjin Shipping, the country’s largest shipping company.
The income account surplus stood at $550 million in June, a 49 percent decrease from $1.09 billion a year earlier. Exports jumped 6 percent on-year to $47.99 billion while imports rose 18 percent to $38.28 billion.
BY PARK EUN-JEE [firstname.lastname@example.org]
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