The Bank of Korea announced on June 2 that Korea recorded a provisional current account surplus of US$8.14 billion in April this year to record a 13.7 percent increase from a year earlier and a 22 percent decrease from a month ago. It added that the surplus for the first four months of this year totaled US$31.59 billion and the surplus continued for 38 consecutive months.
Last month, a drop in international petroleum prices reduced imports more than exports. The goods balance surplus increased from US$11.25 billion to US$12.56 billion between March and April to reach a new high. The exports decreased by 11.2 percent year-on-year to US$50.38 billion, while the imports fell by 17.9 percent to US$37.82 billion. In the meantime, the services account deficit went up from US$970 million to US$1.13 billion.
The Bank of Korea is estimating Korea’s current account surplus for this year at US$96 billion. The amounts were US$81.15 billion and US$89.22 billion in 2013 and 2014, respectively. The new records, however, are attributable to the current recession in which imports decline more rapidly than exports.
The monthly exports dropped by 10.9 percent year-on-year last month, showing no upward movement at all since the beginning of this year. Both the amount and the quantity are on the decline, along with the shipments to main export destinations such as the United States and China. In addition, the continuous surplus is leading to the appreciation of the Korean currency to affect exporters’ competitiveness in the global market. Under the circumstances, the government is planning to release a plan for overseas investment promotion in the second half, which is expected to cover overseas securities investment, pension fund overseas investment, and assistance in the M&As of foreign companies.