S.Korea's current account surplus hits 7-year low in 2019

Source: Xinhua | 2020-02-07

South Korea's current account surplus hit the lowest in seven years last year on an export slump, caused by the global trade spat and the global chip industry's downturn, central bank data showed Thursday.

Current account surplus amounted to 59.97 billion U.S. dollars in 2019, down from a surplus of 77.47 billion dollars in the previous year, according to the Bank of Korea (BOK).

The current account balance, the broadest measure of cross-border trade, stayed in the black for 22 straight years since 1998, but it was the lowest in seven years since 2012.

The lower surplus was attributed to a double-digit fall in export, which accounts for about half of the export-driven economy.

Export for goods declined 10.3 percent over the year to 561.96 billion dollars in 2019, while goods import diminished 6.0 percent to 485.1 billion dollars.

Trade surplus for goods was 76.86 billion dollars last year, down 33.23 billion dollars from the previous year.

The export reduction came amid the global trade dispute and the global semiconductor industry's downturn.

Services account balance, which measures the flow of travel, transport costs and royalties, logged a deficit of 23.02 billion dollars in 2019, down from a deficit of 29.37 billion dollars in the prior year.

Travel account deficit dipped from 16.57 billion dollars in 2018 to 10.67 billion dollars in 2019, contributing to the reduced services account deficit.

Travel income reached a new record high of 21.63 billion dollars last year thanks to a spike in the number of Chinese and Japanese travelers to South Korea, while travel payment reduced 2.83 billion dollars over the year to 32.3 billion dollars in 2019.

The transport account deficit also shrank from 2.51 billion dollars in 2018 to 1.62 billion dollars in 2019.

Primary income account, which includes monthly salary and investment income, reached a record yearly surplus of 12.2 billion dollars last year.

Dividend income hit a record high of 22.68 billion dollars in 2019 on an increased dividend from foreign companies, turning the dividend income balance to a surplus of 3.31 billion dollars last year from a deficit of 3.32 billion dollars in the previous year.

Interest income expanded by 18.24 billion dollars in 2019, sending the interest income surplus to 9.52 billion dollars. It was up from a surplus of 9.39 billion dollars in 2018.

Financial account, which gauges cross-border capital flow without transactions in goods and services, posted a net outflow of 60.95 billion dollars in 2019.

Overseas direct investment by local residents recorded the second-biggest yearly figure of 35.53 billion dollars last year, while foreign direct investment in South Korea increased by 10.57 billion dollars.

For the portfolio investment, which includes stock and bond transactions, overseas investment by domestic residents expanded 58.58 billion dollars in the year. Foreign investment in local stocks and bonds gained 18.46 billion dollars.

In December alone, the current account surplus amounted to 4.33 billion dollars, staying in the black for the eighth consecutive month.

Trade surplus for goods retreated to 5.03 billion dollars in December from 6.63 billion dollars a year earlier.

Services account balance logged a deficit of 2.5 billion dollars as the transport account turned into red in December compared with a year earlier.

The primary income account recorded a surplus of 2.68 billion dollars in the month on a dividend income growth.