S.Korea in March posts first current account surplus in 3 months

The figure reached $270 mn despite lingering deficits in the goods and service balances

S.Korea in March posts first current account surplus in 3 months
Jin-gyu Kang 1
2023-05-11 14:09:06 josep@hankyung.com
Economy

South Korea in March posted a current account surplus for the first time this year thanks to a surge in the dividend account that offset continuous deficits in the goods and service accounts.

The Bank of Korea on Wednesday released provisional data on international balance of payments that showed a current account surplus in March of $270 million. The figure's return to the black followed two straight months of deficits of $4.2 billion in January and $520 million in February.

The surplus was thanks to a big jump in dividend income from foreign companies and a growing surplus in the primary income account.

The dividend account of $3.15 billion was up $800 million from $2.35 billion a month ago, and the primary income account that includes the previous figure jumped from $3.12 billion to $3.65 billion over the same period.

The goods and service accounts remained in the red but on a lower scale. The former posted a deficit of $1.13 billion for the sixth consecutive month since October last year, but this was a far cry from the red figures of $7.32 billion in January and $1.3 billion in February.

The service account saw a deficit for the 11th straight month at $1.9 billion, but $130 million less than $2 billion in February.

Despite the return of a current account surplus, many experts urged against a feeling of safety. The March surplus of $270 million was far lower than $6.7 billion in the same month last year. And if the dividend account surplus declines next month, a period of high demand for offshore dividends, a return to deficit is feared.

"The goods and services accounts have recently shown signs of improvement, so April's current account is unlikely to deviate much from an equilibrium level," said Shin Seung-chul, director general of the central bank's Economic Statistics Department.  

The first quarter's current account deficit of $4.46 billion was the country's first red figure for a quarter since the first in 2012.

Write to Jin-gyu Kang at josep@hankyung.com
#Korea #current account #surplus #Bank of Korea

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