By Lee Hyo-sik
Staff Reporter
South Koreans' overseas spending in November fell at its steepest pace since the 1997-98 Asian financial crisis, as the number of people heading abroad declined sharply on the weak local currency.
With fewer outbound travelers and students studying in foreign countries, the nation's travel account posted a surplus for the second consecutive month.
According to the Bank of Korea (BOK) Monday, Koreans staying overseas for educational purposes spent $168 million in November, down 51 percent from $343 million a year ago. It marks the largest decrease since January 1998, when the country's overseas educational expenditures dropped 61.7 percent year-on-year.
Over the past few years, an increasing number of students and vocational trainees have headed abroad to enroll in foreign schools and spent record amounts of money. Many students decided to stay longer in foreign countries to extend their studies accompanied by family members, increasing overseas education costs.
Analysts have said Korea's poor educational system and infrastructure have failed to keep locals from going abroad for high quality educational services, stressing that the country needs to make greater efforts to upgrade the quality of public schools and the educational and residential environment to keep local students here. From 2002 through 2007, overseas educational spending expanded by over 30 percent annually.
The pace decreased last year due to the won's weakness against the dollar in the wake of the global financial market turmoil, which discouraged locals from spending abroad. Cumulative expenditure in the first 11 months of 2008 decreased 11.5 percent to $4.06 billion from the same period of 2007. The Korean won plunged 25.7 percent against the dollar last year.
The falling Korean won also discouraged local people from spending their money on overseas travel. The central bank said Koreans spent a combined $474 million abroad for leisure in November, down 68 percent from a year earlier. It also marks the largest fall since January 1998, when spending dropped 71.6 percent.
Along with more inbound tourists, decreasing overseas spending by locals helped the nation's travel account post a surplus of $423 million in November for the second straight month. In October, the account surplus reached $495.5 million, the first surplus since April 2001.
A BOK official projected that the travel account balance would continue to improve for the foreseeable future, as more people refrain from heading overseas for study or leisure because of the falling local currency against the dollar and deteriorating economic conditions.
In contrast to fewer outbound travelers, the weakened won has been bringing more Japanese and other foreign visitors to the country over the past few months. The number of outbound travelers dropped 34 percent to 707,500 in November from a year ago, while 579,000 foreign tourists visited the country, up 3 percent, according to the Korea Tourism Organization. Inbound travelers spent $1.06 billion, up 67 percent from $636 million a year earlier.
The official said as the number of Koreans going abroad was also estimated to have declined last month and the number of foreign visitors likely increased, the nation would likely post a travel account surplus for December also, adding that if the trend continues, Korea may post an account surplus this year.
leehs@koreatimes.co.kr
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