(2nd LD) S. Korea's current account surplus hits new record in March

(ATTN: RECASTS lead, para 3; UPDATES with remarks by BOK official in paras 4-6;
TRIMS throughout)
By Kim Soo-yeon
SEOUL, April 29 (Yonhap) -- South Korea posted a record current account surplus
in March as imports declined more sharply than exports and is likely to see
another surplus for April, the central bank said Wednesday.

The current account surplus widened to US$6.65 billion last month from $3.56
billion in February, the Bank of Korea (BOK) said in a report. The current
account is the broadest measure of cross-border trade.
The size of the March surplus was bigger than a central bank forecast and the
largest since January 1980 when the BOK began to compile related data. It is also
expected to help further stabilize the local currency, which rose almost 11
percent to the greenback in March alone.
The BOK predicted that although dividend payouts will likely increase the deficit
in the income account and eased weakness in the local currency could prompt
people to spend more on overseas travel, the country would log another current
account surplus for April.
"As the trade surplus is expected to reach about $4 to 5 billion, the country is
likely to post a current account surplus of around $3 billion for April," Lee
Young-bog, head of the BOK's balance of payments statistics team, told a press
conference.
But Lee warned that it is too early to say whether the country's current account
will maintain its surplus at this point. He did note that a sharp decline in
exports has moderated, helping the current account continue its black-ink streak
since February.
"The record surplus came as the goods balance posted a larger-than-expected
surplus," said Go You-sun, an economist at Daewoo Securities Co. "The current
account is likely to remain in the black for April and thereafter."
The goods balance posted a surplus of $6.98 billion in March, compared with a
revised $3.11 billion surplus the previous month. The country logged a record
goods balance surplus last month as imports declined more sharply than exports.
Overseas shipments declined 17.8 percent on-year to $30.4 billion last month and
imports plunged 35.8 percent to $23.4 billion.
The shortfall in the service account, which includes South Korean spending on
overseas trips, widened to $645.7 million in March, compared with a revised $529
million a month earlier.
The income account, which tracks wages for foreign workers and dividend payments
overseas, logged a deficit of $215.7 million last month, a turnaround from a
revised $484.6 million surplus a month earlier, due to dividend payouts by local
companies to foreign investors.
The capital account, which tracks cross-border investments, posted a net outflow
of $2.18 billion last month, compared with a net outflow of a revised $2.98
billion a month earlier.
The central bank said in early April that Korea is forecast to post a current
account surplus of around $18 billion this year, down from a previous estimate of
$22 billion. The government predicted that the surplus will likely reach around
$16 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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