Global economic funk gives Korea a current account deficit

Containers are stacked at a pier in Incheon on Jan. 10. [NEWS1]

Korea had a current account deficit in November, its first in three months, as exports fell amid fears of a global recession.

According to central bank data Tuesday, the current account deficit in November was $620 million compared to a surplus of $880 million the month before. The last deficit was in August.

In Nov. 2021, the trade surplus was $6.82 billion, according to the preliminary data from the Bank of Korea (BOK) on Tuesday.

There are four major components to the current account: goods, services, income and transfers.

In the January-to-November period, the total current account surplus was $24.37 billion, sharply down from a surplus of $82.24 billion in the same period a year before, the data showed.

The deficits came as exports dwindled amid growing worries of a recession caused by aggressive monetary tightening in major countries, particularly the United States.

Korea exported $52.32 billion worth of goods and services in November, down 12.3 percent from a year earlier. Semiconductor sales, Korea's top export item, fell 28.6 percent on-year in November, customs data showed.

By destination, exports to China plunged 25.5 percent on-year in November as Beijing's strict antivirus curbs hammered the local economy.

Imports inched up 0.6 percent on-year to $53.88 billion in November. This caused the goods balance to post a deficit of $1.57 billion in November, the second straight deficit. In Nov. 2021, the goods account saw a surplus of $6.07 billion.

Falling freight rates and increasing outbound travel bolstered by eased virus curbs also led to an rise in the services account deficit in November.

The services account, which includes spending by Koreans on overseas trips and transport earnings, posted a deficit of $340 million in November, compared with a surplus of $50 million in October. It was larger than the deficit of $270 million in Nov. 2021.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, logged a surplus of $1.43 billion in November, down 37 percent from the previous month's surplus of $2.26 billion.

In Nov. 2021, however, the surplus was only $1.17 billion on account of fewer dividend payouts, according to the data.

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