(2nd LD) S. Korea logs current account surplus for 3rd month

(ATTN: RECASTS lead, para 2-3; UPDATES with remarks by BOK official in paras 4-5;
TRIMS throughout)
By Kim Soo-yeon
SEOUL, May 28 (Yonhap) -- South Korea registered a current account surplus in
April for the third consecutive month as imports shrank faster than exports, the
central bank said Thursday.

The current account surplus reached US$4.28 billion in April, down from a record
$6.65 billion in March, the Bank of Korea (BOK) said in a report. The current
account is the broadest measure of cross-border trade.
April's narrower surplus was due to South Koreans' increased spending on overseas
travel, the central bank said. The surplus is widely expected to further
strengthen the Korean won, which has gained 24 percent against the U.S. dollar
since early March.
Despite a stronger currency, the BOK predicted the country would log a current
account surplus of at least $3 billion for May, depending on the amount of the
trade surplus.
"The won's ascent may prompt more people to travel overseas in May," Lee
Young-bog, head of the BOK's balance of payments statistics team, told a press
conference. "But as there will be no dividend payouts for foreign investors in
May, the income account should improve."
South Korean companies usually pay dividends to foreign shareholders in March and
April, sapping the country's income account balance.
According to the central bank, the goods balance posted a surplus of $6.17
billion in April, compared with a $6.98 billion surplus the previous month, as
imports declined more sharply than exports.
The shortfall in the service account, which includes South Korean spending on
overseas trips, widened to $1.11 billion in April, compared with $645.7 million a
month earlier.
The strengthening Korean won prompted more people to travel overseas, bringing
the travel account to a deficit for the first time in three months.
The income account, which tracks wages for foreign workers and dividend payments
overseas, logged a deficit of $856 million last month, up from a $215.7 million
deficit a month earlier.
The capital account, which tracks cross-border investments, posted a net inflow
of $2.54 billion last month, compared with a net outflow of a revised $2.71
billion a month earlier, due mainly to a large amount of overseas debt sales.
Last month, the government issued $3 billion in dollar-denominated currency
stabilization bonds, the first state debt sale since November 2006.
The central bank said in early April that South 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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