Record Deficit in International Study and Language Training Accounts

With a growing number of kids going abroad to study and students to get English training, the international balance of payment relating to international study and language training posted a record deficit.

But thanks to strong export performance, the nation`s current account continues to post surplus for four consecutive months.

According to `the Trend of International Balance of Payment in August`, released by the Bank of Korea, the deficit related to international study and language training marked the record deficit of $230 million in August, up from $200 million in July.

The number of those going abroad to study or get language training also soared to its record high, 54,878.

But the travel account, which had been in the record deficit of $690 million won in July, further slumped to $670 million, as the 20.5% increase in the number of foreigners entering Korea last month outnumbered the 8.8% rise in the number of Koreans leaving the nation. The total of 454,411 foreigners came to Korea while 793,315 left the country in August.

With the increasing exports of technology and brands, the loyalty account including loyalty for patent use surged by $370 million from last month`s $140 million to post a record deficit.

Korea has continued to post a current account surplus for four months in a row since May. The nation`s current account surplus rose from last month`s $430 million to reach $1.39 million in August. The goods accounts surplus was up by $800 million from $1.57 million in July to reach $2.37 billion in August.

As a result, the accumulated current account surplus from January to August stood at $2.62 million, which was higher than the estimated $2 billion in current account surplus for this year, projected by the central bank.

Cho Sung-jong, who heads the Economic Statistics Department of the Bank of Korea said, ˝Despite 10.4% rise in export this month, a mere 5.1% rise in import boosted the deficits in the goods accounts and current account. The next month is expected to post $1 billion current account surplus, thereby putting greater upward pressure in the value of the national currency, the won.˝

Joong-Hyun Park sanjuck@donga.com