South Korea’s current-account surplus rose in June to its highest level in eight months on strong exports of automobiles and steel products, providing further support to the strengthening local currency.
The current-account surplus, the broadest measure of Korea’s trade with the rest of the world, totalled $2.99 billion last month, up from a revised $2.18 billion in May, the Bank of Korea said Thursday. That compared with a surplus of $4.33 billion a year earlier.
The June surplus was the largest since the $5.11 billion surplus in October last year. The current-account balance has now been in the black for 16 consecutive months.
Seasonally adjusted, the current-account balance posted a surplus of $1.10 billion in June, up from a surplus of $631 million in May.
Economists expect the underlying trend of current-account surpluses to continue for the remainder of 2011, supporting the South Korean won, which has risen about 8 per cent this year against the US dollar. However, they say the surplus is likely to shrink as imports rise with the improving economy and increasing prices of oil and raw materials.
The BOK said the country will run a current-account surplus in July similar to June’s level and is on track to meet the annual target of $15.5 billion.
“Japan has yet to recover from the earthquake. Korea’s exports will likely remain solid in the second half,” said Kim Young-bae, director-general of the BOK’s economic statistics department.
For the first six months of 2011, the current-account surplus reached $9.06 billion, below the BOK’s earlier forecast of $9.4 billion.
Thursday’s data showed South Korea’s goods-account balance posted a surplus of $3.66 billion in June, up from $1.63 billion in May.
The services account, which includes outlays by South Koreans on overseas trips, posted a deficit of $632.4 million last month, swinging from a surplus of $15.5 million in May.
The primary income account, which tracks wages for foreign workers and dividend payments overseas, logged a surplus of $239.8 million last month, compared with a surplus of $517.3 million in May.
The capital and financial account, covering cross-border investments, posted a net outflow of $4.64 billion in June, compared with a net outflow of $3.96 billion the previous month, according to the bank.