Current Account in Deficit Again
By Yoon Ja-young
Staff Reporter
The current account recorded a deficit for the fourth consecutive month in March, despite the trade account turning to a surplus for the first time in three months and the services account reducing its deficit.
According to the Bank of Korea (BOK), the current account stood at $50 million in deficit in March, making the total current account deficit in the first quarter $5.2 billion, much bigger than the $1.7 billion deficit a year ago.
The $50 million deficit, however, is much smaller than the $2.4 billion of the previous month, and $2.8 billion in January.
The central bank attributed the improvement to the trade account surplus and the decreasing deficit in the services account, plus dividend income from the listing of VISA Card on the New York Stock Exchange.
The trade account recorded a $530 million surplus, up from a $600 million deficit in the previous month, thanks to booming exports. Exports recorded $36.1 billion in March, up 18.6 percent from the previous year. The double-digit export growth rate has helped Korea maintain a current account surplus for a considerable time, but the recent international oil price hike turned it into deficit in January and February.
Imports grew 25.8 percent in March, falling from the 31.2 percent increase in January and 27.6 percent gain in February.
The services account deficit narrowed to $680 million, from $2.3 billion in February. Korea recorded an $820 million surplus in transportation services thanks to booming exports, while the deficit in the travel account stood at $570 million, the smallest figure in three years and one month, due to the weakening of the Korean won against the greenback.
The services account deficit in the first quarter of this year was $5.1 billion, much smaller than the $6.2 billion deficit a year ago.
The $1.2 billion dividend income following listing of VISA Card on the New York Stock Exchange also helped cut the current account deficit in March.