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27497
Thu, 10/30/2008 - 16:40
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https://www.oananews.org//node/27497
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Current account shortfall narrows to US$1.22 bln in September
SEOUL, Oct. 30 (Yonhap) -- South Korea's current account deficit narrowed sharply in September from a record high one month earlier as oil prices fell and exports remained bullish, the central bank said Thursday.
The current account shortfall reached US$1.22 billion in September, compared with
a deficit of $4.7 billion the previous month, the Bank of Korea (BOK) said in a
report.
In the January-September period, the country logged a cumulative deficit of $13.8
billion, compared with a surplus of $2.8 billion a year earlier, according to the
bank.
The bank earlier forecast that the country is expected to log an annual current
account deficit of about $10 billion, which would mark the first deficit since
1997.
The central bank said that the country is likely to log a current account surplus
of more than $1 billion in October as trade balance is expected to swing back to
the black.
"Falling oil prices are helping the trade balance shift to the black," said Yang
Jae-ryong, head of the central bank's balance of payments statistics team. "Also,
the shortfall of the service account is expected to narrow sharply on reduced
overseas travel."
The country had posted shortfalls for the seventh straight month since December,
marking the longest red-ink streak since the 1997 Asian financial crisis, due to
higher energy prices and weak overseas demand.
The current account is the broadest measure of trade, service and investment
flows into and out of the country.
The South Korean economy, Asia's fourth-largest, has seen its export growth slow
in the past few months in tandem with a global economic slump, while its import
bills increased sharply due to higher oil prices. South Korea is the world's
fourth-largest oil importer.
Customs-cleared exports increased 28.2 percent on-year to $37.59 billion in
September, compared with $36.64 billion a month earlier.
Imports of raw materials, including crude oil, reached $25.13 billion in
September, compared with $26.19 billion the previous month, according to the
central bank.
A widening shortfall of the current account, coupled with rising overseas debt
and a selling spree of local stocks by foreign investors, is putting downward
pressure on the already-weakening local currency.
The won has declined more than 30 percent versus the dollar so far this year, in
turn putting upward pressure on already-high inflation.
BOK Gov. Lee Seong-tae said earlier that the instability of South Korea's
currency market is expected to firm up once its current account deficit goes back
to the black in the coming months.
The goods balance posted a deficit of $760 million in September, narrowing from a
deficit of $2.8 billion in August.
The shortfall of the service account, which includes South Korean spending on
overseas trips, narrowed to $1.24 billion from $2 billion.
The capital account, which tracks cross-border investments, recorded a net inflow
of $4.78 billion in September, compared with a net inflow of $5.32 billion a
month earlier, mainly due to continued stock sell-offs by foreign investors.
sam@yna.co.kr
(END)
The current account shortfall reached US$1.22 billion in September, compared with
a deficit of $4.7 billion the previous month, the Bank of Korea (BOK) said in a
report.
In the January-September period, the country logged a cumulative deficit of $13.8
billion, compared with a surplus of $2.8 billion a year earlier, according to the
bank.
The bank earlier forecast that the country is expected to log an annual current
account deficit of about $10 billion, which would mark the first deficit since
1997.
The central bank said that the country is likely to log a current account surplus
of more than $1 billion in October as trade balance is expected to swing back to
the black.
"Falling oil prices are helping the trade balance shift to the black," said Yang
Jae-ryong, head of the central bank's balance of payments statistics team. "Also,
the shortfall of the service account is expected to narrow sharply on reduced
overseas travel."
The country had posted shortfalls for the seventh straight month since December,
marking the longest red-ink streak since the 1997 Asian financial crisis, due to
higher energy prices and weak overseas demand.
The current account is the broadest measure of trade, service and investment
flows into and out of the country.
The South Korean economy, Asia's fourth-largest, has seen its export growth slow
in the past few months in tandem with a global economic slump, while its import
bills increased sharply due to higher oil prices. South Korea is the world's
fourth-largest oil importer.
Customs-cleared exports increased 28.2 percent on-year to $37.59 billion in
September, compared with $36.64 billion a month earlier.
Imports of raw materials, including crude oil, reached $25.13 billion in
September, compared with $26.19 billion the previous month, according to the
central bank.
A widening shortfall of the current account, coupled with rising overseas debt
and a selling spree of local stocks by foreign investors, is putting downward
pressure on the already-weakening local currency.
The won has declined more than 30 percent versus the dollar so far this year, in
turn putting upward pressure on already-high inflation.
BOK Gov. Lee Seong-tae said earlier that the instability of South Korea's
currency market is expected to firm up once its current account deficit goes back
to the black in the coming months.
The goods balance posted a deficit of $760 million in September, narrowing from a
deficit of $2.8 billion in August.
The shortfall of the service account, which includes South Korean spending on
overseas trips, narrowed to $1.24 billion from $2 billion.
The capital account, which tracks cross-border investments, recorded a net inflow
of $4.78 billion in September, compared with a net inflow of $5.32 billion a
month earlier, mainly due to continued stock sell-offs by foreign investors.
sam@yna.co.kr
(END)
