Subscribe
E-Paper
 |
By Lee Kyung-min
The nation's goods account surplus fell to a nearly five-year low of $5.48 billion in February due to a major setback in exports, the Bank of Korea (BOK) reported Thursday.
The figure was down from the previous month's $5.57 billion and the worst since July 2014 when it stood at $5.42 billion.
The key culprit behind the dwindling surplus was sluggish exports caused by slowing demand for semiconductors and petrochemical goods amid falling crude oil prices.
The country's key growth engine decreased 10.8 percent to $40.13 billion in February from a year ago, the biggest monthly drop since it sank 18.5 percent in April, 2016.
"Semiconductor prices turned downward, while exports of oil goods stayed in the doldrums," a BOK official said.
"It was also affected by slowing exports to China due to a manufacturing slowdown there."
The goods account surplus is not likely to see a major turnaround in the coming months, given exports, which have been contracting since December, also fell 8.2 percent in March due to falling chip sales.
Beset by the falling goods account surplus, the country's current account surplus also decreased to $3.6 billion in February from $3.9 billion a year earlier. The current account has been in the black for the 82 consecutive months.
Imports also fell 12.1 percent to $34.65 billion, the largest drop since July, 2016.
The decline was due to reduced demand for machinery mostly from chip manufacturers and stemming from an overall softening in demand.
A drop in petrochemical products and crude oil was another driver of the decline in imports.
The services account deficit narrowed to $1.72 billion in February from the previous month's $2.61 billion due mostly to slight improvements in the travel account.
The smaller deficit despite the steady increase in the number of Koreans taking overseas trips can be explained by a decrease in their per capita expenditure there, the BOK said.
Similarly, while the number of inbound travelers from China and Japan has been rising, they do not spend as much money, a reason the travels account has not experienced a major improvement.
"Before taking overseas trips, many travelers on a budget fully plan ahead, seeking more cost-saving options by gathering information online. So the number of travelers and their expenditure should be taken into account at the same time," the BOK official said.
The BOK cautioned against making projections about a possible deficit in the current account in April, a month subject to greater seasonal factors.
"The goods account surplus is on a continued decline and dividend payouts are on schedule, which could adversely affect this month's figure," the official said.
"However, no projections can be made with certainty because improvements in the services account have been observed over the past few months. Also, goods account figures, oil prices and the U.S.-China trade dispute can all come into play," she added.
