Current Account Surplus Hits Record $43.7 Bil. in 2009
By Lee Hyo-sik
Staff Reporter
Korea posted its biggest surplus ever in foreign trade and other international monetary transactions last year on the back of strong exports and foreign investors actively buying local stocks and bonds.
The Bank of Korea (BOK) said Wednesday that the current account, the broadest measure of trade, services and investment flow into and out of the country, was $43.7 billion in the black in 2009.
The surplus was larger than the $40.4 billion recorded in 1998 when imports plunged sharply in the aftermath of the Asian financial crisis. In 2008, Asia's fourth-largest economy recorded a $5.78 billion shortfall.
The nation's trade surplus also rose to an all-time high as exports remained robust despite the worldwide economic downturn, while its capital account posted the largest surplus ever as foreigners brought a record amount of dollars into the country to purchase domestic stocks and bonds.
In December, the current account surplus narrowed to $1.52 billion, the lowest level since Jan. 2009 when Korea lost $1.61 billion in international trade, as a stronger won against the greenback encouraged more locals to head overseas and made Korea-made goods more expensive abroad.
The trade account posted $56.1 billion in the black in 2009, up sharply from a $5.7 billion surplus the previous year. The 2009 figure was the largest since the BOK started gathering data. Customs-cleared exports fell 13.7 percent to $373.6 billion last year, while imports dropped 25.7 percent to $317.5 billion.
The capital account, which traces cross-border portfolio investments, posted a net inflow of $26.4 billion in 2009, also the largest ever, as foreigners purchased local securities totaling $50.7 billion. In 2008, the nation posted a net outflow of $50.1 billion.
``Stronger-than-expected outbound shipments and plunging imports pushed up the nation's current account surplus to the record-high last year, along with foreign investors' aggressive net-buying of local securities. But the size of the surplus will likely shrink sharply this year, due to rising prices of oil and other raw materials amid the economic rebound,'' a BOK official said.
He said the services account balance will deteriorate this year, with more Koreans traveling overseas on the back of the strengthened local currency, projecting the current account surplus will shrink substantially in 2010 to around $17 billion.
The services account shortfall reached $17.2 billion in 2009, up from 16.7 billion in the red the previous year, while the income account, which tracks wages for foreign workers and dividend payments abroad, posted $4.5 billion in the black, down from $5.9 billion in 2008.