The Bank of Korea announced on July 5 that South Korea’s current account surplus totaled US$5.94 billion in May this year, down 43.4% from a year ago.
The goods account surplus reached US$8.83 billion as commodity exports and imports increased 10.2% and 20.1% year on year to US$46.9 billion and US$38.06 billion, respectively. Meanwhile, its service account deficit increased from US$1.07 billion to US$1.69 billion between May 2016 and May 2017.
The travel account deficit, in particular, soared from US$250 million to US$1.36 billion during the period to hit a 22-month high. This has to do with the long holiday season in early May this year and a rapid decline in the number of inbound tourists that followed the economic retaliation from China related to THAAD deployment in South Korea.
“A rise in oil price, an increase in machinery imports, and an increase in capital expenditure led to the significant rise in commodity imports and a decline in goods account surplus,” the central bank explained, adding, “The decline in current account surplus also has to do with an increase in overseas dividend payment by South Korean companies.”
The transportation and construction accounts posted a deficit of US$260 million and a surplus of US$400 million, respectively. The account related to the use of intellectual property rights showed a surplus of US$240 million, an all-time high, as some large corporations’ patent royalty income increased in May.
The primary income account deficit totaled US$690 million as dividend payment jumped to US$1.73 billion to result in a dividend account deficit of US$870 million. The country’s reserve assets increased by US$80 million.