S. Korea posts current account surplus for 4th month in May

(ATTN: ADDS foreign loan figures in para 9; CORRECTS gov't estimate in para 10)
By Park Bo-ram
SEOUL, June 26 (Yonhap) -- South Korea posted a current account surplus in May
for a fourth straight month as imports fell faster than exports, but the amount
narrowed from the previous month, the central bank said Friday.

The current account surplus stood at US$3.63 billion in May, compared with $4.25
billion a month earlier, the Bank of Korea (BOK) said in a report. The current
account is the broadest measure of cross-border trade in goods and services.
The current account has been in the black since February as imports dropped at a
faster pace than outbound shipments. The expanding surplus has boosted the local
currency, which gained 22 percent as of Thursday from March when it tumbled to an
11-year low against the U.S. dollar.
"The BOK expects the current account to reach more than $3 billion in June,
bringing the first-half total to around $20 billion," said Lee Young-bog, a BOK
official.
According to the report, the surplus in the goods account was $5.02 billion last
month, compared with a $6.13 surplus in April. Imports plunged 39.4 percent
on-year to $22.9 billion last month while exports fell 27.3 percent to reach
$27.9 billion.
A shortfall in the service balance, which includes South Korean spending on
overseas trips, widened to $1.47 billion in May from $1.11 billion the previous
month as a stronger won prompted more Koreans to travel overseas, it said.
The income account, which tracks wages for foreign workers and dividend payments
overseas, swung to a surplus of $360 million last month, compared with a deficit
of $856 million in April, as overseas dividend payouts declined.
The capital account, which tracks cross-border investments, posted a net inflow
of $6.72 billion compared with a surplus of a revised $2.16 billion a month
earlier.
"The rise in the May capital account came after local banks increased foreign
borrowing while overseas investors remained net buyers of local stocks and
bonds," Lee said. Local banks and other financial institutions brought in $3.11
billion in May, up from $1.43 the previous month.
The central bank said in early April that South Korea is forecast to post a
current account surplus of around $18 billion this year. The government on
Thursday revised its forecast to $25 billion, up from a previous $16 billion
prediction.
pbr@yna.co.kr
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