Current account surplus hits 8-month high
According to the Bank of Korea on Thursday, Korea’s current account surplus amounted to $8.68 billion in May. That’s the largest monthly surplus recorded since last September’s $12.3 billion. Compared to a year ago, the current account surplus grew 48 percent from $5.84 billion.
The central bank said the current account surplus was due to strong exports of memory chips.
“Thanks to the favorable growth in the [global] semiconductor market, exports increased by a large amount,” said a BOK official. “Additionally, imports also saw strong growth on the back of escalating international crude prices and greater demand for consumer goods.”
Exports in May were up 14.5 percent to $53.8 billion, while imports rose 10.5 percent to $42.4 billion compared to a year ago. Export growth was double the 7 percent year-on-year increase reported in April while import growth fell from 12.5 percent.
The goods account surplus grew 32 percent year-on-year to $11.4 billion. Among exported goods, semiconductors saw the sharpest growth, increasing 43 percent year-on-year to $11 billion. Chemical exports trailed behind with a 26.6 percent increase to $6.41 billion. Automobiles, on the other hand, dipped 0.9 percent, while ships plummeted nearly 68 percent.
Despite rising global protectionism, Korea’s exports went up. Exports to China rose the most, at 30 percent, up from April’s 23.1 percent. In May, $13.9 billion worth of Korean goods were shipped to the neighboring country.
Exports to Japan came in second, with 15.8 percent growth. Exports to the United States reversed the previous month’s 1.4 percent decline to 11.8 percent. Exports to the Middle East, on the contrary, fell by 6.3 percent, a turnaround from after their 8.3 percent increase in April.
While the goods account has contributed to the overall current account surplus, the service sector continued to struggle, despite an increase in the number of Chinese tourists visiting Korea.
Last year, the local tourism industry suffered heavily, as China protested against the installation of a U.S. antimissile system in Korea. But as relations have improved recently, Chinese tourists have started to return.
However, the travel account deficit increased by the largest amount in three months, as the number of Koreans traveling abroad continues to grow. Although the number of people traveling to Korea grew 26.6 percent to 1.23 million in May, the number of people who left the country grew by 16.4 percent to 2.33 million.
The travel account deficit in May amounted to $1.33 billion, the largest since February’s $1.4 billion. The service account deficit deepened from $1.64 billion a year ago and $1.98 billion in April to $2.09 billion in May.
BY LEE HO-JEONG [firstname.lastname@example.org]