S. Korea posts current account surplus in May

South Korea is expected to have recorded a current account surplus in May, reversing the previous month's current account deficit that was the largest in nearly a decade, the country's top economic policymaker said Monday.

"The country suffered a current account deficit in April, but we expect a US$1 billion-$1.5 billion current account surplus in May," Finance Minister Han Duck-soo said in a speech at a meeting with businessmen.

The South Korean economy, Asia's fourth largest, posted a $1.5

billion current account deficit in April, the biggest gap since 1997, on rising oil costs and repatriation of stock dividends by foreign investors. It was the third straight monthly deficit.

"Economic indicators such as overseas demand, consumer prices and others are generally showing signs of stability," Han said, adding that the economy will expand 5 percent this year because of high oil prices and a firmer won versus the U.S. dollar.

The economy grew 6.1 percent annually in the first quarter, the highest gain in almost three years.

Bank of Korea Gov. Lee Seong-tae said two weeks ago that the nation's economy will continue expanding in the second half of this year on higher overseas shipments and consumer spending.

The central bank raised its key interest rate by a quarter of one percentage point to 4.25 percent, citing increased inflationary pressure stemming from high oil prices and the economic recovery.

As for other matters, Han said South Korea will seek free trade agreements with European Union (EU) countries, India and Russia.

"We plan to hold three meetings with the EU this year on the trade pact... and we are in negotiations with India to forge an FTA," he said. South Korea and the United States made significant progress in their first round of FTA talks early this month.

Negotiators for the South Korea-U.S. FTA, known as the KORUS FTA, are racing against time to reach an agreement before the U.S.

trade promotion authority expires in July next year.

The authority requires the U.S. Congress to vote for or against the FTA without amendments.

Given the three-month review process by the Congress, the FTA draft has to be concluded by early spring at the latest. The next round is slated for Seoul on July 10-14.Seoul, June 19 (Yonhap News)