Korea's current account surplus down 10% in March

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Korea's current account surplus down 10% in March

Published: 10 May. 2022, 15:12 Updated: 10 May. 2022, 18:55

Hwang Sang-pil, director general of the central bank's economic statistics department, speaks at a press conference held Tuesday. [YONHAP]

Korea registered a current account surplus of $6.73 billion in March, down 10.27 percent on year.

It is the 23rd consecutive monthly reading in the black.

The current account is a sum of the balance of trade, net income from abroad and net transfers.

March's goods account surplus was down 32 percent on year to $5.31 billion as import costs increased, according to the Bank of Korea on Tuesday.

The services account was $360 million in surplus from a $1.10 billion deficit in the same month a year earlier on a strong transport account.

Korea's transport account in March was $1.55 billion, up 172 percent on year. A rise of export freight rates contributed to the increase.

The Shanghai Containerized Freight Index, an index of freight rates for container ships from Shanghai, jumped 74.5 percent on year in March.

Exports in March were up 17 percent on year to $64.51 billion, while imports were up 25 percent to $59.2 billion.

Imports increased for 15 months straight from a rapid rise of raw material import prices.

"Despite favorable exports, imports of raw materials inevitably surged from the rapid rise of raw material prices due to the Ukraine crisis as Korea relies heavily on raw materials from overseas," said Hwang Sang-pil, director general of the central bank's economic statistics department, at a press conference held Tuesday.

The primary income account surplus was down 11 percent on year to $1.15 billion in March, while the secondary income account was in deficit by 90 million from a 540 million deficit in the same month a year earlier.

Primary income includes employee compensation and investment income. Secondary income refers to transfers between residents and non-residents.

Hwang projects Korea to continue reporting a current account surplus from a continued increase of exports, despite multiple risks, like the rise of raw material prices, economic slowdown in key countries and global supply chain disruptions.

BY JIN MIN-JI [jin.minji@joongang.co.kr]