S. Korea logs 2nd-largest current account surplus in June

(ATTN: RECASTS headline, paras 11,12; UPDATES with remarks by BOK official in paras
5-6)
By Kim Soo-yeon
SEOUL, July 29 (Yonhap) -- South Korea posted the second-largest current account
surplus ever in June as exports of steel and electronic products picked up, and
will likely see another surplus for July, the central bank said Wednesday.

The current account surplus reached US$5.43 billion last month, up from a revised
$3.5 billion in May, the Bank of Korea (BOK) said in a report. The cumulative
surplus was a record $21.75 billion for the first half.
The country's current account, the broadest measure of cross-border trade, has
remained in the black since February as imports have declined faster than exports
amid the global downturn. The June figures marked the largest surplus since March
when it reached a record $6.65 billion.
The surplus is widely expected to further strengthen the Korean won, which has
gained 27 percent against the U.S. dollar since early March.
"The June surplus came as overall export growth picked up. The country is likely
to post a surplus run for the time being although uncertainty exists," Lee
Young-bog, head of the BOK's balance of payments statistics team, told a press
conference.
"For July, seasonal factors like summer vacation could prompt the service account
deficit to increase, but given expected brisk exports, the country is likely to
post a current account surplus of around $4 billion for July."
The goods balance posted a surplus of $6.61 billion in June, compared with a
$4.88 billion surplus the previous month. The country logged a record goods
balance surplus of $6.98 billion in March.
Overseas shipments declined 22.5 percent on-year to $31.6 billion last month and
imports tumbled 33 percent to $25 billion.
The shortfall in the service account, which includes South Korean spending on
overseas trips, narrowed to $1.45 billion last month, compared with $1.47 billion
a month earlier.
The capital account, which tracks cross-border investments, posted a net outflow
of $404 million last month, compared with a net inflow of $7.02 billion a month
earlier.
Experts said June's current account surplus mainly came as companies expanded
overseas shipments to bolster their balance sheets for the first half.
"June's sizable numbers came as companies boosted exports ahead of doing their
first-half book balancing," said Jun Min-kyu, an analyst at Korea Investment &
Securities Co. "The surplus gap is forecast to narrow for July and August."
The bank revised up its forecast of the country's current account surplus this
year in early July. It said Korea is forecast to post a current account surplus
of around $29 billion in 2009, up from its previous estimate of $18 billion. The
government predicted that the surplus will likely reach around $25 billion.
Last year, South Korea registered 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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