Tourism Deficits Hit The Record

Pasting the high season of summer back in July, Korea saw its tourist deficits recording the highest ever in its history.

With a general strike by Hyundai Motors occurring at the same time, an increasing rate of current account surplus has also significantly reduced.

According to the “International Trend for July” released by the Bank of Korea on August 29th, the nation`s current account surplus has been maintained for the three months in a row since May, but only with the increasing amount of 430 million dollars compared to 1.71 billion dollars in June.

Tourism deficits rather increased from 520 million dollars in June to 690 million dollars in July. This is a rise of 100 million dollars from the previous highest deficits of 590 million dollars in January.

This makes this year`s accumulated tourism deficits up to 2.91 billion dollars up to the present.

The Bank of Korea told that national tourists overseas increased by 51 percent from 484,000 in June to 729,000 in July while foreign tourists to Korea only rose by 27 percent from 296,000 to 377,000, leaving a great gap between the balance.

Expense wise, Korean tourists to overseas spent 1253 dollars while foreign tourists to Korea only 990 dollars per person.

With this rise in tourism deficits, deficits in the service sector also grew from 770 million dollars to 1090 million dollars, which is the biggest since January`s 1.186 billion dollars.

The Hyundai Motors strike contributed to worsen commodity account balances with dropped exports. Commodity account surplus recorded 1.57 billion dollars in July, dropped by 1.18 billion dollars from 2.75 billion dollars in June.

Capital account balances was transfused with 950 million dollars by foreigners` stock investments, but the short-term loan reimbursements by domestic financial institutes exceeded the number by 400 million dollars.

Joong-Hyun Park sanjuck@donga.com