Sluggish Exports Are to Blame
The Bank of Korea announced on Aug. 6 that South Korea posted a current account surplus of US$21.77 billion in the first half of this year and the surplus dropped 25 percent in one year. The first-half surplus is the smallest half-yearly surplus since the first half of 2012, when it stood at US$9.65 billion.
The significant drop in surplus was led by exports, which remained sluggish throughout the first half. South Korea’s exports totaled US$277.72 billion in the first half of this year with a year-on-year decline of 9.8 percent and the country showed the first negative year-on-year growth in half-yearly exports in two and a half years. South Korea’s imports fell 5.7 percent to US$240.66 billion and its goods account surplus stood at US$37.06 billion in the first half of this year. The goods account surplus dropped 29.3 percent in one year.
“The drop in exports is attributable to the prolonging trade war between the United States and China, the dropping unit prices of semiconductors and oils, sluggish exports to China, and so on,” said the Economic Statistics Department of the Bank of Korea, adding, “South Korea’s service account deficit added up to US$12.35 billion in the first half, the smallest since the second half of 2016, with an increasing number of people arriving from China and Japan.”