(2nd LD) S. Korea`s current account swings to deficit in Jan.

(ATTN: UPDATES with remarks by BOK official and more info in paras 4-6, 13)
By Kim Soo-yeon
SEOUL, Feb. 27 (Yonhap) -- South Korea recorded its first current-account deficit
in four months in January as exports were pounded by a sharp downturn in global
trade, the central bank said Friday.
The current account shortfall reached US$1.36 billion in January, a turnaround
from a $860.8-million surplus the previous month, the Bank of Korea (BOK) said in
a report. South Korea's current account, which measures trade, service and
investment flows between the country and the rest of the world, had been in the
black between October and December.
The report is feared to put downward pressure on the local currency, which hit a
near 11-year low against the U.S. dollar on Thursday. The won has fallen 17
percent against the greenback so far this year amid jitters over local lenders'
dollar liquidity.
The BOK said January's deficit stemmed from plunging global demand for Korean
goods, but added the country is expected to post a current account surplus for
February.
"If South Korea's trade surplus reaches $3 billion in February, it is possible
that the country will see more than $3.5 billion in the current account surplus,"
Yang Jae-ryong, head of the central bank's balance of payments statistics team,
told a press conference.
Knowledge Economy Minister Lee Youn-ho said Thursday South Korea's trade surplus
is expected to reach $3 billion in February largely due to a sharp drop in
imports.
According to the report, South Korea's customs-cleared exports plunged 33.8
percent on-year to $21.4 billion last month on plunging overseas demand and
shorter working days due to the Lunar New Year holiday.
The goods balance posted a deficit of $1.46 billion in January compared with a
$1.5 billion surplus the previous month, the largest shortfall in five months.
The shortfall of the service account, which includes South Korean spending on
overseas trips, narrowed to $708.5 million in January, compared with $1.52
billion a month earlier.
The capital account, which tracks cross-border investments, posted a net inflow
of $4.86 billion in January, compared with a net outflow of $4.83 billion a month
earlier. The first net inflow in five months was attributed largely to banks'
overseas funding.
Analysts downplayed the current account's switch to red ink, saying seasonal
factors were mainly responsible.
"The country usually sees a small current account surplus or a shortfall in the
first quarter for seasonal reasons," said Kim Jae-eun, an economist at Hana
Daetoo Securities Co. "For the whole year, the country is expected to post the
current account surplus, but it is not likely to log a large surplus as earlier
expected due to tumbling exports."
The central bank predicted in December the country's current account for this
year will remain in the black at around $22 billion. The government has forecast
the current account surplus will reach around $13 billion.
Last year, the country posted its first annual current account shortfall in 11
years of $6.41 billion as soaring oil prices raised import bills.
sooyeon@yna.co.kr
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