By Kang Seung-woo
Korea’s current account surplus hit a 16-month high in July, on the back of robust external shipments, the central bank said Friday. But it forecast the surplus to shrink in the coming months due to a slowdown in overseas demand.
The Bank of Korea (BOK) said the current account recorded a surplus of $5.88 billion (7.02 trillion won) last month _ up from $5.1 billion in June _ thanks to the strong exports of ships and other key products.
The figure was the biggest surplus since March 2009, when it logged $6.64 billion. In addition, it has remained in the black for six months in a row. The current account is the broadest measure of trade that reflects the movement in goods and services.
The July surplus has brought the figure for the first seven months of the year to $17.55 billion. The BOK’s set its yearly prediction at $21 billion.
“The surplus for August is expected to considerably narrow from July on retreats in overseas shipments and a rise in overseas royalty payments,” Lee Young-bog, head of the BOK’s balance of payments statistics team, said at a press conference.
“But if the current trend continues, the yearly surplus is expected to top the central bank's previous estimate.”
The trade account posted a record surplus of $7.38 billion won in July, up from a $6.41 billion surplus the previous month.
Exports chalked up $43.17 billion, a 28.8 percent increase compared to last year, while imports came to $35.78 billion, a 30.7 percent gain.
The services account, which covers the flow of travel and transport costs, recorded a deficit of $1.66 billion in July, affected by the growth of overseas trips during the summer break, while the income account reached a $437 million surplus, up from a $327 million surplus in June.
Despite considering unfavorable factors, such as falling exchange rates and the slowing global economy, the surplus is likely to top $4 billion for the remainder of the year.