Current Account Surplus Narrows to $610.3 Mil. in August

South Korea's current account surplus fell in August from the previous month on increased payments for overseas travel and foreign patent rights, the central bank said Tuesday.

The current account surplus amounted to $610.3 million in August, down from $1.6 billion in July, the Bank of Korea said in a report. It was the fourth consecutive month the country posted a surplus.

The current account is the broadest measure of trade, service and investment flows into and out of the country.

The seasonally adjusted current account surplus amounted to $1.8 billion in August, up from a revised $1.7 billion surplus in July. In the January-August period, the current account surplus reached $534.8 million, compared with a $1.5 billion shortfall a year earlier.

"The country's current account surplus narrowed as the service account deficit became larger on seasonal factors while trade and income account surpluses shrank," the central bank said in the report.

The service account shortfall rose to $2.4 billion in August from a $1.7 billion deficit in July as foreign patent payments rose and South Korean spending on overseas trips surged during the peak summer holiday season.

The trade surplus fell to $2.9 billion in August from a revised surplus of $3 billion in July despite brisk exports, mainly because ship exports shrank.

Customs-cleared exports rose 14 percent year-on-year to $31.1 billion in August on robust overseas shipments of cars, machinery and steel. Imports advanced 9.8 percent to $29.7 billion mainly on high inbound shipments of consumer goods.

The income account surplus, which tracks wages for foreign workers and overseas dividend payments, dropped to $444.3 million in August from $533.5 million in July, as overseas dividend and interest payments rose despite increased interest income from abroad.

The capital account, which tracks cross-border investments, posted a net outflow of $603.5 million in August, a turnaround from a revised net inflow of $537.1 million a month earlier, largely on foreigners' withdrawals of stock and direct investments.

The central bank expects the country's current account surplus to total $2 billion in 2007, down from $6.1 billion last year, mainly due to a widening service account deficit despite a strong trade surplus.