Current account in surplus for 10th consecutive month

Incheon International Airport on April 6. The decline in the number of Koreans traveling abroad due to the Covid-19 pandemic helped turn the service account to a surplus for the first time in 6 years. [YONHAP]

Korea posted its 10th consecutive monthly current account surplus, with the balance reported by the central bank a positive $8.03 billion in February.

Due to travel restrictions, the service account was in the black for the first time in six years.

According to the Bank of Korea on Wednesday, the current account balance is up 25 percent compared to the same month the previous year. The current account has been in surplus since May last year.

The biggest contributor was the goods surplus, which is the difference between exports and imports, though the goods surplus was down on year due to a rapid increase in imports.

Exports in February grew 9.2 percent to $44.7 billion, while imports grew 12.6 percent year-on-year to $38.7 billion. It was the first double-digit growth in imports in more than two years, the last being in October 2018.

In February the goods surplus amounted to $6.05 billion. That's smaller than the $6.6 billion surplus recorded in the year-earlier period.

Raw material imports grew 6.6 percent year-on-year, the fastest growth in nearly two years. Capital goods imports rose 20.6 percent, while consumer goods imports increased nearly 26 percent.

"While crude, which accounts for a large portion of raw material imports, remained relatively cheap, there has been an increase in non-energy raw material imports, such as minerals and steel, which raised the overall raw material import figure," said Lee Sung-ho, Bank of Korea director from the economic statistics department.

The service account, which has been chronically in the red, was positive for the first time since November 2014. In February, the service account was $130 million in surplus as people stayed in the country due to travel restrictions.

In February, the travel account posted a deficit. But that deficit was $130 million, which is a 62 percent drop from $340 million a year ago.

The turnaround was also affected by the transport account, which reported a $810 million surplus largely due to an increase in cargo shipped overseas as economies recovered.

"Global trade recovered faster than expected since the Covid-19 outbreak last year," said the central bank's Lee.

BY YOON SANG-UN, LEE HO-JEONG [lee.hojeong@joongang.co.kr]