Current account posts surplus for 69th month

Korea’s current account posted a surplus for the 69th consecutive month in November thanks to brisk exports.

The November surplus was relatively small compared to the same month in 2016, largely due to a rise in service account deficit resulting from the number of Koreans traveling and the low level of Chinese tourists traveling to Korea after tensions over a U.S.-led antimissile system.

According to the Bank of Korea on Friday, the current account posted a $7.43 billion surplus. Korea’s current account has been posting a surplus for nearly six years since March 2012. Although the current account surplus increased from October’s $5.72 billion, it was smaller than a year ago when it amounted to $8.03 billion.

The trade account surplus amounted to $11.5 billion, an 18 percent increase compared to the same month a year ago at $9.69 billion. Exports in November grew 11.3 percent year-on-year to $51.5 billion thanks to huge global demands for semiconductors.

Import grew by 9.4 percent, reaching $40 billion.

Although November’s service account deficit was smaller than the all-time record set the previous month at $3.53 billion, it was still the fourth-largest deficit at $3.27 billion.

In fact, when compared to a year ago, the service account deficit has expanded 9 percent.

“As the number of Koreans traveling abroad continues to grow and the number of Chinese tourists visiting Korea shrinks, the travel account deficit fails to turn around,” said a Bank of Korea official. “Added with the shrunken surplus on the construction account due to a decline in orders from the Middle East due to low crude oil prices, the service account deficit continues to remain large.”

The travel account deficit in November amounted to $1.55 billion, doubling the $746 million deficit registered a year ago.

The number of Chinese tourists that traveled to Korea in November fell 42.1 percent compared to the same period a year earlier to 299,000. However, the situation is likely to improve in the coming months as tensions between Seoul and Beijing have been improving since late November, with Chinese authorities approving group tours to Korea. In July when tensions were high the number of Chinese traveling to Seoul plummeted almost 70 percent.

Koreans investing in overseas equities has also continued to grow for 27 consecutive months since September 2015, largely thanks to growing expectations of a global economic recovery. Overseas equity investment amounted to $4.83 billion in November.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]