Current account still in the black
January’s current account surplus reached $2.77 billion, up 4.92 percent from $2.64 billion a year earlier, according to preliminary data released by the Bank of Korea (BOK) on Friday.
But the latest reading represents the smallest monthly surplus since April last year, when it hit a six-year low of $1.77 billion.
The goods account surplus fell to an 11-month low of $5.61 billion in January from $7.55 billion a year earlier due to a drop in exports amid slowing demand for semiconductors and petrochemical goods.
Exports fell 5.4 percent on-year to an 11-month low of $49.38 billion in January, while imports declined 2 percent to $43.77 billion.
The BOK explained that prices of chips have been declining rapidly in recent months. The average price of dynamic random-access memory (DRAM) chips plunged to $3 in January from the previous year’s $4.90.
Moreover, Korea’s exports to China, the country’s biggest trade partner, tumbled 19.2 percent on year to $10.82 billion in January amid trade tensions between Washington and Beijing.
For next month, however, the central bank expected the goods account surplus to widen slightly as a drop in imports has outpaced that in exports.
Based on the latest customs data, Korea’s outbound shipments tumbled 11.1 percent in February, compared to a 12.6 percent plunge in imports.
“Due to fast falling oil prices, imports retreated at a faster pace than exports,” said a BOK official.
Asia’s fourth-largest economy saw its outbound shipments lose ground for three straight months starting in December last year on contracting global demand.
Another notable point came from the services trade, which measures travel, transport and construction balances. The services account struggled last year due primarily to the declining number of tourists visiting Korea.
But the service account deficit reduced in January with a rise in spending and the number of inbound tourists.
The services account deficit narrowed to $3.61 billion from a deficit of $4.44 billion a year earlier as the number of foreign arrivals jumped 15.6 percent on year to 1.1 million in January. The number of departures, however, inched up 1.6 percent to a record 2.9 million.
In particular, the number of Chinese visitors jumped 28.7 percent on year to 393,000, while that the number of Japanese visitors jumped 23.6 percent to 207,000.
BY PARK EUN-JEE, YONHAP [email@example.com]