The Bank of Korea announced on July 4 that South Korea posted a trade surplus of US$4.95 billion in May this year after recording a trade deficit of US$660 million, the first deficit since April 2012, in the previous month.
The immediate recovery was because its goods account surplus was maintained while its service account deficit decreased. In addition, seasonal factors such as dividend payment disappeared in May.
Although South Korea’s goods account surplus added up to US$5.39 billion in May this year, the surplus is the smallest since January 2014, when it totaled US$3.67 billion. This is because its exports, US$48.03 billion, dropped 10.8 percent from a year ago. Semiconductor exports, in particular, plummeted by 29.2 percent on year. The rate of decrease is the largest since March 2009, when it amounted to 36.2 percent.
In May, South Korea’s imports edged down 1 percent on year to US$42.64 billion and its service account deficit totaled US$900 million. The deficit is the smallest since December 2016. The country posted a service account deficit of US$660 million at that time.