Korea's current account surplus returns in May after April dip

Kim Young-hwan, Director of the Monetary & Financial Statistics Division at the Bank of Korea, speaks at the press conference held in central Seoul on Thursday. [BANK OF KOREA]

Korea recorded a current account surplus in May, a rare bight spot for the country as it struggles with a falling currency, runaway inflation and weak stocks.

The $3.86 billion surplus, reported by the Bank of Korea Thursday, was a turnaround from the $80 million deficit in April, though the May figure is still down 63 percent on year.

"The stronger increase of imports compared to exports is continuing for a considerable amount of time due to a rise in prices of raw materials and oil," said Kim Young-hwan, director of the Monetary & Financial Statistics Division at the Bank of Korea, at a press conference held in central Seoul on Thursday. He added gains from the goods account balance are expected to decline for the time being due to a rise in raw materials prices.

Kim projects Korea to report another current account surplus in June, despite a fall of Korean won against the dollar, which drives up import prices.

The won traded at a 13-year-low on Wednesday, touching 1,311 won per dollar. It was 1,299.80 won when the securities market closed on Thursday. The Kospi is down almost 30 percent on year, and inflation is running at about 6 percent.

In May, the goods account was $2.74 billion in surplus, down 59 percent from the same month a year earlier. Exports were up 21 percent, while the imports were up 32 percent during the same period.

Exports rose for the 19th month straight, led by petroleum products, steel products and semiconductors. Exports to the Middle East rose 49 percent on year, while those to the Central and South America increased 32.4 percent in the same period.

Imports of energy products, including crude oil and coal, soared 75 percent.

The services account was $20 million in deficit in May, from a $730 million deficit in the same month last year. The transport surplus increased 39 percent on year to $1.47 billion, while the construction services surplus was up 15 percent to $380 million. The travel account was $640 million in deficit, from a $700 million deficit a year earlier.

Korea's primary income account, which reflects wages, interest income and dividends, was $1.45 billion in surplus, down 71 percent on year, largely due to dividend payouts in May last year, according to the central bank.

Korea will "likely report a current account surplus in June," Kim said. "If Korea's current account balance is $1.83 billion in June, it will likely have a 21-billion-dollar surplus in the first half of this year, an outcome projected by the research bureau" of the central bank.

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