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| S Korea's current account deficit drops to $377.5 mln |
SEOUL, June 27 (Xinhua) -- South Korea's current account deficit narrowed sharply in May due to the fall of local firms' dividend payments to foreign investors despite a slowdown in export growth, the South Korean central bank said Friday.
According to the Bank of Korea (BOK), the current account shortfall reached 377.5 million U.S. dollars in May, significantly down from 1.58 billion U.S. dollar deficit in the previous month. However, May marked the sixth consecutive month of deficits, the longest red-ink streak since the 1997 Asian financial crisis, the BOK added.
The BOK predicted South Korea's current account balance may stay in the red in June as high oil prices show no signs up falling and the setback in exports due to the truckers' strike, which crippled cargo traffic in major ports.
"Whether June's current account swings to a surplus will depend on the chances that exports related to ship delivery offset the effect of oil prices and setbacks from the truckers' strike," said Yang Jae-ryong, head of the central bank's balance of payments statistics team. Yang added that 1.86 billion U.S. dollars in ship delivery will be stated as exports in June.
Meanwhile, the income account, which tracks wages for foreign workers and dividend payments overseas, swung into the black with 459.2 million U.S. dollars in May, a major switch from a deficit of 1.93 billion U.S. dollars in the month earlier, according to the BOK.
The turnaround came as Korean companies that close their books in December paid less dividends to offshore investors, the BOK added.
The trade balance stood at a surplus of 612.5 million U.S. dollars in May, down from a revised 1.63 billion U.S. dollars in April, as export growth slowed while imports bills were raised by the soaring oil prices, the BOK said.
The BOK said customs-cleared exports gained 26.9 percent year-on-year to 39.4 billion U.S. dollars last month while imports grew 28.8 percent to 38.5 billion. U.S. dollars.
The service account deficit, which includes South Korean spending on overseas trips, widened to 1.17 billion dollars in May, compared with a revised shortfall of 979 million dollars a month earlier, as overseas payments for patent rights increased, the central bank said.
The central bank said in February that the annual current account deficit may exceed its initial forecast of 3 billion U.S. dollars, the first deficit since 1997, amid soaring raw material prices. The Finance Ministry said the deficit is expected to reach up to 10 billion U.S. dollars this year, up 3 billion U.S. dollars from its initial estimate.
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