Korea's current account surplus rose to the highest level in one year in October as exports declined on-month at a slower pace than imports, the central bank said Tuesday.
The current account surplus reached $4.23 billion October, up from a revised $2.83 billion the previous month, according to the Bank of Korea (BOK). The current account is the broadest measure of cross-border trade.
The October reading marked the largest surplus since $5.49 billion tallied in October last year.
The current account remained in the black for the 20th straight month on exports, which account for about 50 percent of the Korean economy.
The combined surplus amounted to $19.23 billion in the first 10 months of this year, easily exceeding the central bank's yearly surplus of $15.5 billion.
The central bank said that South Korea's full-year current account surplus may reach $25 billion or more.
"The surplus for November is likely to be similar to the October data," Yang Jae-ryong, director of the BOK's monetary and financial statistics division, said at a press conference. "The annual surplus is likely to reach $25 billion, given that the monthly surplus average stands at $2 billion. But the total volume will depend on the global economy."
Yang noted that the eurozone debt crisis is influencing Korea's balance of payments to some degree.
Another BOK official said that export figures were not bad last month, but the country's overseas shipments have begun to be affected by developments in the eurozone and the global economic slowdown, given that exports volumes to the U.S. and the European Union declined from a year ago.
The downbeat global economic outlooks and the eurozone debt crisis are raising economic uncertainty, fueling concerns that Korea's exports would be dented.
In the first 20 days of this month, exports on a customs-cleared basis are estimated to have grown 7.1 percent on-year to $28.4 billion, according to data by the finance ministry.
BOK Gov. Kim Choong-soo said last month that the current account surplus for next year is likely to miss the BOK's estimate of $17 billion due to worsening external conditions.
South Korea's goods balance posted a surplus of $3.65 billion in October, up from a revised $2.1 billion in September, the central bank said.
Last month, exports and imports grew at a faster pace compared with the previous year, but they declined on-month amid mounting global economic uncertainties.
Exports declined 1.33 percent on-month to $46.6 billion and imports fell 4.83 percent to $42.9 billion.
The BOK downplayed the concerns that the October surplus in goods balance was driven by a sharp fall in imports, not by export growth.
"In October, imports fell faster than exports mainly because more companies raised the portion of overseas production and imports declined on a seasonal factor," Yang said.
The service account, which includes outlays by South Koreans on overseas trips, posted a surplus of $2.8 million last month, down from $70.6 million in September.
The primary income account, which tracks wages for foreign workers and dividend payments overseas, logged a surplus of $643.5 million in October, up from $543 million tallied in September.
Meanwhile, the capital and financial account, covering cross-border investments, posted a net outflow of $4.47 billion in October, larger than a net outflow of a revised $4.34 billion in September, the central bank said. The October data marked the largest net outflow in 13 months.
In October, foreign investors snapped up local bonds and stocks, making portfolio investments log a net inflow of $3.92 billion. In September, such investment posted a net inflow of $1.77 billion. (Yonhap)