(Korea's) Current account deficit hits 6-year high
Last month Korea suffered the largest monthly current account shortfall in nearly six years, due to a drastic surge in oil imports and shrinking overseas demand, the Bank of Korea (BOK) said yesterday.
The balance, which measures flows of goods and services in and out of a country in a given period, posted $1.19 billion in the red in March, marking the fourth consecutive month of shortfalls and the largest deficit since the outbreak of the 1997 economic crisis.
The March figure compared to a $66.3 million deficit in February and a surplus of $969.1 million a year earlier. "The main reason for the deficit was that both the goods trade balance and the income balance have turned into the red, although the service balance deficit narrowed," said Cho Sung-jong, director general at the BOK's economic statistics department.
Going forward, the current account balance will likely remain in the red even in April, the official said, adding that the balance is expected to shift back to positive terrain in May.
In the year to March, the accumulated deficit amounted to $1.68 billion, causing skepticism that the current account deficit for the full year may be bigger than the $1 billion that the central bank predicted last month.
The deficit during the first quarter of the year also sharply contrasts with a $1.59 billion surplus for the first quarter of the previous year.
The goods trade balance in March recorded a $63.4 million deficit, shifting from a $544.1 million surplus in February. It is the first time the country has recorded a deficit in its goods trade balance since October 1997, according to the central bank.
"Imports surged drastically on a hike in oil prices, while exports remained lackluster due to falling chip prices," said the BOK official.
The country's income account balance fell to a deficit of $433 million in March, from a $460 million surplus in February, as interest payments on foreign debts and dividend payouts increased.
The service account deficit in March reached $500 million, narrowing from an $890 million deficit a month ago, due to a decrease in royalty payments and business service payments.
The capital account in March stood at a $101 million surplus compared with an $80 million deficit a month ago.
The capital account balance in the January to March period stood at $932.1 million, up from $740.8 million during the same period last year.
(sam@koreaherald.co.kr)
By Park Sang-soo
koreaherald.co.kr |
