S. Korea logs current account surplus for 14th month in June on robust exports

South Korea posted a current account surplus for the 14th straight month in June as exports remained solid amid the global economic recovery, the central bank said Friday.

The current account surplus reached US$8.85 billion in June, compared with $10.76 billion the previous month, according to the Bank of Korea (BOK). The current account is the broadest measure of cross-border trade.

The current account has been in the black since the country suffered a deficit of $3.33 billion in April last year on faltering exports caused by the pandemic.

The June surplus came as exports remained robust and dividend income from Korean firms’ overseas units increased, the BOK said.

In the first half, the accumulative surplus amounted to $44.34 billion, the largest in five years.

The BOK said the annual surplus may reach around $81 billion as the trend is expected to continue into the second half on brisk exports.

“But the spread of the highly contagious COVID-19 delta variant and price changes in raw materials will be major factors” that will affect the surplus size, Hwang Sang-pil, a senior BOK official, said in a press briefing.

This photo, taken Aug. 2, 2021, shows stacks of containers at a port in South Korea’s southeastern city of Busan. (Yonhap)

Exports, which account for half of the South Korean economy, rose 35.9 percent on-year to $53.63 billion, while imports increased 38.2 percent to $46.02 billion.

The service account, which includes outlays by South Koreans on overseas trips, logged a deficit of $950 million in June, compared with a shortfall of $560 million in May.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, logged a surplus of $2.53 billion in the month, smaller than a surplus of $5.49 billion in May.

The capital and financial account, which covers cross-border investments, posted a net inflow of $4.29 billion in June, compared with a net inflow of $8.38 billion the previous month.

Asia’s fourth-largest economy is on a recovery track on brisk exports of chips and autos, and improving domestic demand.

But the latest spike in COVID-19 cases and the fast spread of the delta variant emerged as major downside risks for the economic recovery.

In May, the BOK raised its 2021 outlook for the current account surplus to $70 billion from its earlier estimate of $64 billion. The 2022 surplus is expected to reach $65 billion, it added.