South Korea's current account surplus sank to a four-year low in 2006 due to increased oil and raw material prices and a hike in overseas travel expenses, the central bank said Wednesday.
The current account surplus more than halved to US$6.09 billion last year from $14.98 billion a year earlier, the lowest level since a $5.39 billion surplus in 2002, the Bank of Korea said. The figure, however, was slightly higher than the central bank's estimate of $6 billion.
In December, the current account surplus stood at $146.7 million, down from $4.24 billion in November and $280 million a year earlier.
The current account is the broadest measure of trade, services and investment that flows into and out of the country.
"Despite robust exports, the current account surplus narrowed sharply last year due to a jump in overseas tourist spending, and increased oil and commodity costs," said Jeong Sam-yong, head of the central bank's balance of payments statistics team.
This year, the current account surplus is expected to come to $2 billion as a widening service account deficit will likely continue to offset a strong trade surplus, he said.
Despite a double-digit increase in exports, the trade surplus fell to $29.21 billion in 2006 from $32.68 billion a year earlier as increased prices of oil and raw materials offset a surge in exports.
Customs-cleared exports rose 14.5 percent annually to $325.68 billion in 2006 as overseas shipments of heavy industry products such as steel, machinery and ships continued their double-digit growth for a second straight year while exports of petrochemical products surged 34.4 percent over the previous year.
However, bullish exports were offset by a 23.1 percent surge in oil imports last year as the price of Dubai Crude, South Korea's benchmark, soared 24.8 percent annually.
The service account deficit soared to a record $18.76 billion last year from $13.66 billion as spending on overseas trips surged.
The travel account deficit shot up nearly 35 percent to $12.92 billion.
The income account balance, which tracks wages for foreign workers and dividends, posted a deficit of $538.6 million last year, a drop from a $1.56 billion deficit the previous year.
The capital account balance, which tracks the flow of cross-border investment, marked a net inflow of $18.62 billion last year compared with a net inflow of $4.76 billion the previous year as local banks' short-term foreign loans soared, the central bank said.
Seoul, Jan. 31 (Yonhap News)
S. Korea's current account surplus hits four-year low in 2006 |
