South Korea's current account shifted back into positive territory in May with a surplus of nearly 3.9 billion U.S. dollars. But this is down by 6.five billion dollars from the surplus recorded in May 2021.
Shin Ha-young has details.
South Korea's current account surplus in May rebounded back from a deficit posted a month earlier.
According to data released by the Bank of Korea on Thursday, the balance of trade in May amounted to a surplus of almost 3.9 billion U.S. dollars led by strong exports of goods like semiconductors and petroleum products, which rose about 20 percent from a year earlier.
However, the surplus was down more than 6.5 billion dollars compared to a year before as the cost of importing raw materials has soared due to the war in Ukraine and lockdowns in China.
The goods account surplus dropped to 2.7 billion U.S. dollars from 6.6 billion last year.
The cost of importing raw materials like coal and oil jumped 53 percent on-year, halving the goods account surplus when compared to the figure from 2021.
"The Korean current account surplus was down from a year earlier as growth in imports of goods exceeded exports.
It is also because the primary income surplus decreased mainly due to a surge of dividend income in May last year."
There was a base effect of large dividend payments last year as companies saw high profits, which led to a decrease in the primary income account surplus this May."Primary income" refers to wages of foreign labourers and overseas dividend payments.
One expert projects that the country will post a current account deficit in June due to similar reasons for May's decreased surplus.
"I expect the current account to be in deficit in June because we were expecting a large merchandise trade deficit in June due to rising costs of oil and rising import value of oil and raw materials."
Shin Ha-young, Arirang News.