By Kang Seung-woo
Korea posted its largest export figures in 26 months in November, the central bank said Thursday. But imports also went up significantly, more than halving the nation’s trade surplus from the previous month.
According to the Bank of Korea (BOK), the nation’s exports amounted to $42.1 billion last month, which is the largest amount since July 2008, when it hit a record $43.8 billion.
In accordance with the monthly gain, Korea, Asia’s fourth-largest economy, totaled $421.5 billion between January and November to surpass the $400 billion in annual exports reached in 2008.
The November imports totaled $38.75 billion, which was the fourth largest amount in history and the largest since September 2008, when the amount was $39.22 billion won.
Due to the growth in imports, the trade balance, the biggest component of the current account, recorded a surplus of $3.35 billion, down from $5.39 billion a month earlier.
“It is significant that imports and exports both increased, but growth in imports was affected by a rise in imported raw materials including crude oil,” said Lee Young-bog, head of the BOK’s balance of payments statistics team.
The decrease in the trade balance translated into a sharp fall in the surplus of the current account, which is the broadest measure of cross-border trade.
The bank said that the nation’s current account saw a steep drop from $4.89 billion in October to $1.93 billion in November, with the cumulative surplus reaching $25.06 billion.
The November reading was the smallest surplus since $1.73 billion in August, but it still remained in the black for nine months in a row on the strength of bullish exports, which represent around 50 percent of the nation’s economy.
From December, its current account figures were revised in accordance with a new calculation method, under which any cash flow generated in the course of the shipbuilding process are marked as exports.
Entering this year, the government estimated that the nation’s current account surplus will reach $21 billion, which was eclipsed in July.
Despite the drop last month, the government expects the current account surplus for December to rebound impressively thanks to strong exports.
“Given overseas shipments remain robust, a sizable surplus is expected for December,” Lee said. “The full-year surplus is likely to be around $29 billion.”
The central bank predicted earlier this month that next year’s current account surplus will remain at $18 billion.