South Korea's current account deficit widened in August as the service account shortfall surged during the peak summer vacation season, the nation's central bank said Wednesday.
The current account deficit reached US$508.1 million in August, compared with a revised deficit of $392.7 million a month earlier, according to the Bank of Korea. It was the second consecutive monthly deficit.
The current account is the broadest measure of trade, service and investment flows into and out of the country.
As more South Koreans headed overseas for summer vacations, the service account deficit hit a record of $2.1 billion last month, the central bank said. South Koreans spent $1.4 billion overseas for travel and education, compared with $1.2 billion a month earlier.
"Despite the deficit this month, the current account balance is expected to be brisk in September as the annual 'Chuseok' fall harvest holiday, which fell in September last year, will fall in early October this year," said Jeong Sam-yong, head of the central bank's balance of payments statistics team.
"In October, however, the balance may log another deficit as the fall harvest holiday cuts the number of working days and increases service payments overseas," he said.
The cumulative current account deficit reached $1.33 billion in the first eight months of the year, compared with a surplus of $9.49 billion a year earlier.
The trade balance, which covers the nation's exports and imports, posted a surplus of $1.57 billion in August, down from $1.62 billion a month earlier.
Exports, on a customs-cleared basis, rose 17.6 percent to $27.5 billion last month from a year earlier due to increased shipments of chemicals, steel and machinery overseas. Imports also grew 23 percent to $27 billion due to a sharp rise in imports of oil.
The surplus of the income account, which includes South Korea's dividend payments overseas, increased to $310 million due to a decline in dividend payments to foreign investors.
The capital account, which tracks cross-border investments, posted a net inflow of $1.2 billion, compared with a net inflow of $1.7 billion, the central bank said.
Seoul, Sept. 27 (Yonhap News)
S. Korea's current account deficit widens in August |
