Posted December. 30, 2009 02:10,
Korea is expected to post a record current account surplus of more than 43 billion U.S. dollars this year, with the figure exceeding 40 billion dollars through last month.
The economy is apparently escaping from a current account surplus derived from recession, with exports and imports both rising.
The Bank of Korea said Tuesday that the November current account surplus was 4.28 billion dollars, down from 4.76 billion dollars in October.
The cumulative current account surplus for the year was 41.15 billion dollars from February, when the current account balance returned to the black to post 10 consecutive months of surpluses, to November. On an annual basis, the surplus topped the previous record of 40.37 billion dollars set in 1998.
The trade account surplus was 5.84 billion dollars last month as both exports and imports rose year-on-year. Exports rose 18 percent last month after falling 5.6 percent in October, while imports rose 2.4 percent after dropping 16 percent.
This was the first time since November last year that both exports and imports gained year-on-year. Analysts say this suggests that the Korean economy is back on the expansion track and is escaping from a recession-derived current account surplus, which occurs when imports decline more than exports.
Lee Yeong-bok, head of the international account balance team at the Bank of Korea, said, Decembers current account surplus will decline a bit from Novembers, but the current account balance will likely stay in the black. Hence, the current account surplus will likely exceed 43 billion dollars this year.
Increased competiveness of flagship industries despite the global economic crisis is the main reason for Koreas surplus. The countrys five key industries of DRAM chips, mobile handsets, cars, ships and displays saw their global market shares reach new highs.
The stellar export performance was also fueled by price factors, including the weak won and cheaper raw materials.
Park Hyeong-jung, an analyst at Woori Investment and Securities, said, International oil prices remained at half of last years level and the won remained weak. The yen was strong, creating a favorable environment for Korean exporters.
Net capital inflows last month reached 1.54 billion dollars, raising the figure from January through last month to 24.81 billion dollars. This broke the previous annual record of 23.33 billion dollars set in 1996.