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(LEAD) S. Korea posts 1st current account deficit in 2 yrs in April amid high commodity costs, dividend payments

Economy 09:34 June 10, 2022

(ATTN: ADDS BOK's forecast, more info, photo)

SEOUL, June 10 (Yonhap) -- South Korea posted its first current account deficit in two years in April as soaring energy and commodity prices pushed up import bills and overseas dividend payments expanded, central bank data showed Friday.

The Bank of Korea (BOK) said that the April deficit appears to be temporary and the current account will return to a surplus in May, given that such seasonal factors as dividend payments will be removed.

According to the preliminary data from the BOK, the country's current account shortfall came to US$80 million in April, compared with a surplus of $180 million registered a year earlier.

This marked the first current account deficit since April 2020, when the country logged a deficit of $4.02 billion. It also turned around from a surplus of $7.06 billion in the previous month.

During the January-April period, the cumulative account surplus reached $15.31 billion, down from a surplus of $22.52 billion in the same period a year earlier.

The BOK has predicted that the country will log $50 billion in current account surplus for this year by registering a surplus of $21 billion in the first half and $29 billion in the latter half.

The April deficit came as the country's import bills mounted at a faster pace than money earned from exports amid soaring energy and major commodity prices caused by global supply chain disruptions and the ongoing war in Ukraine.

Exports amounted to $58.93 billion in April, up 11.2 percent from a year earlier, while imports expanded 16.5 percent to $55.98 billion over the cited period.

As a result, the goods balance posted a surplus of $2.95 billion in the month, down from the previous year's surplus of $4.95 billion, the data showed.

Also contributing to the deficit were expanded overseas dividend payments, whose balance stood at a shortfall of $3.82 billion in April. Including the dividend payments, the primary income account posted a deficit of $3.25 billion, according to the data.

The service account, which includes outlays by South Koreans on overseas trips and transport earnings, logged a surplus of $570 million in April thanks in part to high freight rates. It marked a turnaround from a deficit of $130 million a year before.

(LEAD) S. Korea posts 1st current account deficit in 2 yrs in April amid high commodity costs, dividend payments - 1

kokobj@yna.co.kr
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