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(LEAD) S. Korea tipped to post current account surplus from May

All News 14:35 June 04, 2020

(ATTN: ADDS another vice minister's remarks, details in last 4 paras)

SEJONG, June 4 (Yonhap) -- South Korea is expected to begin posting current account surpluses in May, Vice Finance Minister Kim Yong-beom said Thursday, adding that April's account deficit was mainly due to a sharp rise in dividend payments to foreign investors.

Kim made the remarks after the Bank of Korea (BOK) announced the nation posted a current account deficit of US$3.12 billion in April, marking a turnaround from a $5.96 billion surplus in March. The April reading marked the largest current account deficit since January 2011.

"The current account is expected to continue a trend of surplus starting in May," Kim said in a Facebook message.

The file photo shows stacks of import-export cargo containers at South Korea's largest seaport in Busan, around 450 kilometers southeast of Seoul. (Yonhap)

The current account measures trade in goods, services, tourism and investment.

Most listed firms paid dividends in April, and foreign investors held about 35 percent of listed shares, Kim said.

The April current account deteriorated because a deficit in the income account balance widened, Kim said.

The April deficit also came one year after the country posted its first current account deficit in 84 months, due mostly to what the BOK had then called an unusually high seasonal increase in dividend payments.

South Korea's exports plunged 24.3 percent on-year to $36.9 billion in April, while imports dropped 15.9 percent to $37.8 billion, leaving a $950 million trade deficit.

Earlier this week, the government proposed a third extra budget of 35.3 trillion won ($29 billion) to cushion the economic blow from the coronavirus pandemic.

It was the first time in 48 years that South Korea drew up a third extra budget in a year,

Vice Finance Minister An Il-whan told a KBS radio that the government will spare no efforts to revive economic growth with the third extra budget, ruling out the possibility of a fourth extra budget.

The government has not discussed a plan to raise taxes to fund tax-revenue shortfalls, An said.

kdh@yna.co.kr
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