Current Account Surplus Hit Record Last Year

The current account surplus hit a record 42.67 billion U.S. dollars last year but will post a big fall this year, the Bank of Korea said yesterday.

A bank report said the record surplus of last year stemmed from imports falling considerably more than exports and the merchandise account surplus setting a new high of 56.13 billion dollars due to a sharp fall in imports.

The travel account deficit dropped last year due to the weaker won, but the service account deficit rose to 17.2 billion dollars because of a decline in the transportation account surplus and a rise in the extra service deficit.

The income account surplus decreased from 5.9 billion dollars in 2008 to 4.55 billion dollars last year because of lower interest income. In the capital market, net inflow reached 26.45 billion dollars, the highest since 1980, as a large amount of foreign investment was poured into the Korean stock market.

In December last year, however, the current account surplus fell to 1.52 billion dollars, the lowest in 11 months and down from 4.28 billion dollars in the previous month. Korea has had a current account surplus for 11 months, but the amount has decreased over the past two months.

Lee Yeong-bok, the head of the central bank’s international balance of payments team, said, “Boosted by a large merchandise account surplus, Korea posted a record current account surplus last year. But the current account surplus will decrease significantly as international oil prices soar and the Korean economy recovers.”

weappon@donga.com