Posted November. 28, 2008 03:00,
The country last month posted the largest current account surplus since the Bank of Korea began compiling the statistic in 1980.
As November is likely to see another surplus of more than one billion dollars, Korea`s accumulated annual deficit is expected to drop below 10 billion U.S. dollars.
The Bank of Korea said yesterday that the current account posted a surplus of 4.91 billion dollars last month. The current account stayed in the red from December last year to September this year except in June, which saw a surplus of 1.82 billion dollars.
The bank had earlier forecast an October surplus of one billion to two billion dollars, but falling global oil prices, a travel account surplus, and lackluster imports due to the slumping real economy brought on a record surplus.
The goods account balance also shifted to a surplus of 2.79 billion dollars from a deficit of 890 million dollars in September, thanks to declining imports and lower prices of oil and raw materials.
The deficit in the service account narrowed to 50 million dollars in October from 1.24 billion dollars in September. This was largely due to a record travel account surplus of 500 million dollars driven by the decline in overseas travel stemming from a weaker won. Last months travel account surplus was the first since April 2001, when the surplus reached 300 million dollars.
With the cumulative shortfall in the current account narrowing to 9.01 billion dollars and an anticipated surplus in November, the Bank of Korea expects the annual deficit to drop to 10 billion to 11 billion dollars.
A massive outflow of dollars, however, widened the shortfall in the capital account. Last month posted a net outflow of 25.53 billion dollars, up from 4.78 billion dollars in September. This is because domestic lenders repaid foreign loans worth 20.4 billion dollars with funds drawn from foreign reserves.
Overseas credit card use dropped 1.4 percent to 1.85 billion dollars in the third quarter from the second due to the decline in overseas travel. The drop was the first since the first quarter of 2004, when the credit card bubble burst in Korea.