The Bank of Korea announced on June 5 that South Korea posted a current account deficit of US$660 million in April for the first time since April 2012, when multiple European countries’ fiscal crises affected South Korea’s exports to Europe.
The current account deficit in April this year was led by the goods balance. Specifically, South Korea’s exports, which had been US$51.51 billion in April 2018, fell for the fifth consecutive month to US$48.3 billion amid the ongoing trade war between the United States and China and a decline in unit price in the semiconductor industry.
Meanwhile, the country’s imports totaled US$42.63 billion, up 1.8 percent from a year ago, as a result of higher raw material import prices and increased machinery imports. South Korea’s imports rose in four months.
In April this year, South Korea’s deficit added up to US$4.99 billion when it comes to the dividend income balance. The deficit is the third-largest in history behind those of April 2018 and April 2017.
The dividend income deficit amounted to US$6.36 billion in April 2018 and US$5.12 billion in April 2017. However, the country recorded US$1.36 billion and US$3.18 billion in current account surplus in those months, respectively. This is why experts are pointing out the South Korean economy as a whole, including the export side, is facing structural problems.
The country posted a service account deficit of US$1.43 billion in April this year. The travel and transportation sides improved to result in the smallest service account deficit since December 2016. The travel income reached a 53-month high of US$1.7 billion as more inbound tourists arrived from China and Japan. South Korean travelers’ overseas payments fell to US$2.37 billion as the number of outbound tourists fell.