Korea likely to post surplus in service balance for first time in 14 years
Korea will likely post a surplus in its service balance for the first time in 14 years this year thanks to improvements in the construction, transportation and tourism sectors, a government report showed Tuesday.
According to the report by the finance ministry, the country's service balance, which is the difference between exports and imports in the service sector, has posted a surplus of $2.7 billion during the January-October period, a turnaround from a deficit of $5.35 billion tallied a year earlier.
The ministry expected that if the current trend continues, the country will post a surplus of about $5.7 billion at the end of this year.
"The service balance for 2012 will likely turn around to post a surplus for the first time in 14 years since 1998 on the back of declined shortfalls in tourism and expanded surplus in the construction and transportation sectors," the report said.
In 1998, the country posted a surplus but it was mostly driven by an abnormal plunge in overseas spending in the wake of the financial crisis.
Not counting that year, the surplus forecast for 2012 would be the country's first since the service balance turned red in 1990, the ministry said.
During the January-October period, the construction sector saw its service balance improve by $4.77 billion from a year earlier, while the transportation and tourism sectors logged $2.68 billion and $2.29 billion improvements over the same period. The service balance in the intellectual property rights area, however, saw a $1 billion deterioration.
The ministry said that whether the country will keep its surplus in the service balance next year as well depends on many factors including the number of overseas travelers, performances in the construction sector and a possible increase in overseas spending bolstered by the strong local currency.
"We will do our utmost to consolidate the surplus trend in the service sector by attracting more foreign tourists, improving the competitiveness of businesses and encouraging our service-related industry to advance into overseas markets," the ministry said. (Yonhap)