Korea's surplus surpasses $35 billion as imports tumble

Korea logged a current account surplus of $35.49 billion last year, up 37 percent on-year. A port in Busan on Thursday. [NEWS1]

Korea reported $35.49 billion in current account surplus last year, beating the $30 billion projection by the Bank of Korea (BOK) and a jump of 37 percent from a year earlier.

The country logged a current account surplus of $7.41 billion in December, an eighth straight month of increase on the back of a rising trade surplus and overseas dividends, showed the BOK’s preliminary data on Wednesday.

The December figure is more than three times larger than the $2.31 billion logged in the same month a year earlier.

“Exports and imports both declined last year from a year earlier due to a slowing global economy and a fall in energy prices, but the size of the surplus grew as imports shrunk by a larger volume,” said Shin Seung-chul, director-general of the BOK’s economic statistics division.

“We project annual current account surplus to register $49 billion and expand to $59 billion next year. The biggest contributor will be favorable exports helped by the recovery of the IT sector, including semiconductors. The trend will continue throughout this year.”

The annual goods account more than doubled on year to register $34.09 billion last year from $15.62 billion a year earlier. It was helped by exports of automobiles and vessels, which grew 32.1 percent and 18.6 percent, respectively. On-year chip exports advanced 19.1 percent in December alone, but it fell 23.8 percent annually.

Exports to China and Japan plunged 19.9 percent and 5.2 percent, respectively, annually. But outbound shipments to the United States rose 5.4 percent and those to the Middle East were up 7.5 percent over the same period.

“The proportion of Korea’s exports to China will fall while those to the United States and Vietnam grow. That may change the status of China as Korea’s largest export country,” Shin added.

The deficit in the services account expanded to a whopping $25.66 billion from $7.25 billion over the same period, largely due to the deficits in the travel account that registered a negative $12.53 billion compared to the $8.37 billion deficit a year earlier. The transport account swung into negative territory to report a $1.55 billion deficit last year from a $13.1 billion surplus a year earlier.

An increase in outbound travelers and a recovery of Chinese tourists centered on individual travelers instead of group tourists reduced their spending in Korea, according to the BOK.

The primary income account, which tracks the wages of foreign workers, dividend payments from overseas and interest income, was $31.61 billion, up 55 percent on year.

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