Korea logs $5.87 billion account surplus, second straight month in the black

Containers are unloaded at a port in Incheon on June 9. [NEWS1]

Korea logged $5.87 billion in current account surplus in June, the second straight month the balance has stayed positive.

The June figure was a dramatic jump from the $1.93 billion surplus tallied in May, showed the Bank of Korea’s preliminary data on Tuesday.

Account surplus for goods and primary income jumped, while the deficit for the services account expanded in June from a month earlier.

“The services account is projected to continuously report a deficit due to various factors, including summer vacation,” Shin Seung-chul, director general of the Bank of Korea’s economic statistics division, said about the account balance in July during a press conference held in central Seoul. “But goods balance and primary income are projected to exceed the [service account's deficit] to report an account surplus in July.”

The goods account reported a surplus of $3.98 billion, up from $1.82 billion in surplus a month earlier.

Exports were down 6 percent on year to $54.23 billion in June, due to a fall in petroleum products and chips, which plunged 40.5 percent and 28 percent, respectively. Data communication equipment also dropped 25.8 percent over the same period. Exports of vessels soared 96.2 percent and automobiles were up 60.7 percent.

Exports to the European Union jumped 18 percent and those to the Middle East were up 14.8 percent, while exports to China and Southeast Asia nosedived 19 percent and 17.9 percent, respectively.

Surplus for primary income, which tracks the wages of foreign workers and dividend payments from overseas, also jumped to $4.85 billion from $1.42 billion over the same period.

The services account reported a $2.61 billion deficit, expanding from $910 million in May. It was largely due to the travel sector that recovered following the eased regulations against the pandemic.

“External uncertainties remain at large,” Shin said, noting international oil prices, alongside the recovery of China’s economy and the IT sector. He added that it remains difficult to predict the economy for the second half.

The Crude Oil West Texas Intermediate Futures rose into the low $80 range in early August after it slid to the $60 region in May.

Korea’s total current account in the first half of this year sits at $2.44 billion in surplus, compared to $24.87 billion in the same period last year.

“It is meaningful that [Korea] maintained a surplus for 12 consecutive years despite the challenging external conditions. The surplus amount has withered after reporting a record deficit in January, but it is a favorable performance considering the deficit forecasted by multiple economic institutions for the first half of the year,” Shin added.

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