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(2nd LD) S. Korea's current account surplus hits 2-year high in Sept. on export recovery

All News 11:18 November 05, 2020

(ATTN: CORRECTS figures in paras 9-10)
By Kim Soo-yeon

SEOUL, Nov. 5 (Yonhap) -- South Korea's current account surplus hit a two-year high in September as exports rebounded for the first time in seven months on brisk shipments of chips and autos amid the new coronavirus outbreak, the central bank said Thursday.

The current account surplus reached US$10.21 billion in September, compared with $6.57 billion the previous month, according to the Bank of Korea (BOK). The current account is the broadest measure of cross-border trade.

It marked the largest surplus since September 2018, when the current account surplus reached $11.24 billion. The size of the surplus also topped the $10 billion mark for the first time in two years.

The surplus amounted to an accumulative $43.4 billion in the first nine months of the year, larger than $41.84 billion in the same period of last year.

The current account has been in the black for the fifth straight month after South Korea logged a deficit of $3.33 billion in April, the largest in almost a decade, on faltering exports amid the COVID-19 pandemic.

The BOK said the sizable surplus came as the goods balance sharply improved in September on the back of solid exports of semiconductors, chemical goods and automobiles.

This file photo, taken June 4, 2020, shows stacks of import-export cargo containers at South Korea's largest seaport in Busan, 450 kilometers southeast of Seoul. (Yonhap)

The central bank said the country is presumed to have posted another current account surplus in October, given the trend of exports and imports.

"Taking into account customs-cleared trade figures, the current account surplus is projected to be in good shape last month, though the size would have been smaller than in September," Park Yang-su, head of the BOK's economic statistics department, said in press a briefing.

The official said the full-year surplus is likely to top the BOK's 2020 forecast of $54 billion.

In August, the BOK lowered its 2020 outlook for the current account surplus to $54 billion from its previous estimate of $57 billion, citing sluggish global trade amid the pandemic.

"Given the improving trend of exports, the full-year surplus is likely to top the BOK's target and may reach closer to last year's surplus of $60 billion," Park said.

The official also added that a resurgence in coronavirus cases and uncertainty surrounding the outcome of the U.S. presidential election will serve as downside risks to the surplus outlook.

The goods balance logged a surplus of $12.02 billion in September, larger than a surplus of $7.01 billion the previous month.

The surplus in the goods balance also hit a two-year high in September mainly because exports posted on-year growth for the first time since February, the BOK said.

Exports, which account for half of the South Korean economy, rose 8 percent on-year to $49.85 billion in September, while imports inched up 1 percent to $37.83 billion.

The country's overseas shipments have been battered by the fallout of the COVID-19 pandemic this year. But the pace of the slump has eased since June as major economies slowly began resuming business activities and border lockdowns.

The service account, which includes outlays by South Koreans on overseas trips, logged a deficit of $2.04 billion in September after suffering a shortfall of $800 million in August.

A combined deficit of the service account narrowed in the January-September period from a year earlier as the pandemic disrupted demand for foreign travel.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, logged a surplus of $610 million in September, compared with a surplus of $630 million the previous month.

The capital and financial account, which covers cross-border investments, posted a net inflow of $8.91 billion in September, compared with a net inflow of $4.84 billion the previous month.

This photo, taken on Aug. 16, 2020, shows almost no passengers at the international flights terminal of Incheon International Airport, South Korea's main gateway west of Seoul, amid the COVID-19 pandemic. (Yonhap)

sooyeon@yna.co.kr
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