South Korea’s current-account surplus widened to a record in June as concern over slowing global growth capped consumer sentiment and demand for imports.
The surplus was $5.8 billion, compared with a revised surplus of $3.6 billion in May, the Bank of Korea said in a statement in Seoul today. The current account is the broadest measure of trade, tracking goods, services and investment income.
Asia’s fourth-largest economy grew at the slowest pace in almost three years last quarter, with BOK Governor Kim Choong Soo warning this week the nation risks failing to meet a 3 percent growth estimate for 2012. HSBC Holdings Plc and Citigroup Inc. have said policy makers may follow a July 12 rate cut with more easing this year.
“Imports declined across the board from capital goods to consumer goods, boding ill for the economy,” said Park Sang Hyun, chief economist at HI Investment & Securities Co. in Seoul. “The quality of trade is deteriorating fast with both exports and imports shrinking. We may see another rate cut as early as next month.”
Imports of capital goods dropped to $11.3 billion in June from $11.7 billion in May while imports of consumer goods fell to $4.3 billion from $4.5 billion, according to today’s report. Imports of raw materials slipped to $26.8 billion from $28.6 billion on falling prices.
Gross domestic product expanded 2.4 percent in the three months through June from a year earlier, compared with the median 2.5 percent estimate of 15 economists surveyed by Bloomberg News, according to a Bank of Korea report yesterday. From the previous quarter, growth was 0.4 percent.
The won advanced 0.5 percent to 1,141.65 per dollar at 9:23 a.m. in Seoul after earlier touching 1,140.33, the highest level since July 20. The Kospi index of stocks gained 1.6 percent.
The surplus on traded goods was $5 billion last month compared with a revised $1.7 billion surplus in May, today’s report showed.
Total exports on a customs-cleared basis rose to $47.3 billion in June from $47 billion in May, according to today’s statement. Imports were at $42.3 billion, down from $44.7 billion May, partly due to falling oil prices. -By Eunkyung Seo