Current account surplus continues for 4 straight month

The current account balance has continued to post a surplus for four consecutive months since May, owing to a boost from increasing exports. The current account surplus recorded US$990 million last month.

According to the Bank of Korea's report on the provisional outlook for the balance of payments on Thursday, the current account surplus increased US$180 million from July to record US$990 million. Consequently, the total accumulated current account surplus from January to August this year reached US$16.63 billion.

The surplus in commodity balance (export-import), which increased by US$610 million from July, totaled US$1.89 billion and amplified the surplus in the current account balance. Semiconductor exports surpassed the monthly maximum of 2 billion won, contributing to the overall increase in exports, while imports fell by US$500 million since July as surcharges were levied on imports to make up for the oil price hike.

Apart from the commodity balance, the service and income balances, which make up the current account balance, recorded a higher deficit or posted an initial deficit. Despite a small reduction in the tourism balance deficit, the in service balance deficit grew to record US$690 million due to increased payments for copyrights and consulting fees.

Income balance also recorded a deficit of US$100 million due to interest payments to the International Monetary Fund and International Bank for Reconstruction and Development.

Capital inflows for August fell to US$190 million from US$1.07 billion in July as Korea Asset Management Corp. and commercial banks repaid insolvent Daewoo loans and overseas borrowings.

Chung Jung-Ho, head of BOK's Economic Statistics Department, asserted that considering the data collected by the Ministry of Commerce, Industry and Energy and the small surplus in the commodity balance up to Sept. 25, as well as the trend of exports and imports cramping at the end of each month, the commodity balance will likely continue to post a surplus of within 1 billion won for September.

He further asserted that as long as international oil prices remain stable, the Bank of Korea's forecasted surplus of US$9 billion would be attainable this year.