Travel account deficit hits record

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Travel account deficit hits record

Korea’s travel account, which measures the amount of money generated from tourism, posted a record deficit in July, hurt by a decrease in the number of visitors to the country and increase in the number of Koreans vacationing abroad, according to figures released Tuesday by the central bank.

Preliminary data from the Bank of Korea showed the country’s travel deficit in July rose 39.8 percent from a year ago to $1.79 billion. Roh Chung-seak, a director at the banks’s economic statistics division, attributed the record shortfall to a decline in tourism to Korea, especially from China. The falling number of Chinese tourists, he said, contributed most to the travel account deficit.

“We expected travelers from Europe and Southeast Asia to offset the decrease,” Roh said, “but visitors from those countries were subdued compared to the same month last year.”

The number of Chinese tourists dropped 69.3 percent from last year to 281,000, while the number of visitors from Japan fell 8.3 percent.

In March, the Chinese government banned travel agencies from sending tourists to Korea in apparent retaliation against a decision made by the Korean government to host a U.S. missile defense system that China believes harms its security interests.

Outside Asia, the number of visitors from Europe went down 4.1 percent, causing the overall tourism figure to fall 40.8 percent to 1 million.

An increase in the number of Koreans traveling abroad widened the account deficit. Korean tourism to other countries hit a record high of 2.39 million in July, increasing 14.5 percent from a year earlier.

The downbeat performance in tourism, which falls under the services account, contributed to a reduction in the overall current account surplus, which fell to $7.26 billion in July compared to $8.41 billion a year earlier.

Still, the latest figure marks a 65th straight month of surplus for Korea, suggesting exports are still relatively healthy. In fact, the goods account, which measures the balance of exports versus imports, expanded its surplus by 0.4 percent from last July to $10.71 billion.

The services account, which encompasses travel, transport and construction, registered a deficit of $3.29 billion.

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