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(LEAD) Current account surplus narrows in Feb. amid surging energy costs

All News 09:54 April 08, 2022

(ATTN: UPDATES with more details in paras 7-11)
By Kim Soo-yeon

SEOUL, April 8 (Yonhap) -- South Korea posted a current account surplus for the 22nd straight month in February, but the surplus narrowed from a year earlier as soaring oil prices boosted import bills, central bank data showed Friday.

The current account surplus reached US$6.42 billion in February, down from $8.06 billion the previous year, according to the preliminary data from the Bank of Korea (BOK).

The current account has remained in the black since May 2020 on the back of robust exports. But the surplus fell on-year in February as imports grew at a faster pace than exports amid surging energy prices.

Crude oil and other raw material prices jumped amid Russia's invasion of Ukraine. South Korea depends mostly on imports for its energy needs.

The goods balance logged a surplus of $4.27 billion in February, smaller than a surplus of $5.86 billion a year earlier.

Exports, which account for half of the South Korean economy, grew 19.1 percent on-year to $53.87 billion, while imports increased 25.9 percent to $49.6 billion.

This photo, taken April 1, 2022, shows stacks of containers at a port in South Korea's southeastern city of Busan. (Yonhap)

On a customs-cleared basis, imports of raw materials jumped 36.7 percent on-year to $28.22 billion in the month. Of them, imports of coal and crude oil soared 171.7 percent and 63.3 percent on-year, respectively.

Dubai crude, South Korea's benchmark, came to an average of $110.93 per barrel in March, up 72.1 percent from a year earlier. It hit a yearly high of $127.86 per barrel on March 9.

The BOK remained cautious about the possibility that the current account could swing to a deficit due to high oil prices.

"As a hike in oil prices deteriorates trade terms, it negatively affects the current account balance," Kim Young-hwan, a senior BOK official, told reporters.

"But as the country posted a current account surplus in 2011, 2012 and 2013 when Dubai crude exceeded $100 per barrel, we need to further watch the current account trend," he added.

The service account, which includes outlays by South Koreans on overseas trips, logged a surplus of $570 million in February, compared with a surplus of $180 million a year earlier.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, logged a surplus of $1.71 billion in the month, down from $2.29 billion the previous year.

The capital and financial account, which covers cross-border investments, posted a net inflow of $8.3 billion in February, compared with a net inflow of $7.42 billion a year earlier.

The BOK forecast the current account surplus could reach $70 billion this year and narrow to $68 billion next year.


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