Export of wings … October current account balance of $ 11.66 billion, ‘3rd in history’

Admission 2020.12.04 08:00

Imports decline more than exports due to falling commodity prices
Freight rates for improving trade ↑ … Increase in transport surplus

Korea’s current account surplus topped $ 11.6 billion in October. It is the third largest ever. While exports, mainly semiconductors and automobiles, were showing good signals, the daily average became an increase in 23 months. However, imports fell sharply due to falling prices for commodities, including oil. As a result, the size of the commodity balance, which represents the gap between exports and imports, exceeded $ 10 billion for two consecutive months.

According to the “ International Balance Sheet for October 2020 (Provisional) ” announced by the Bank of Korea on the 4th, the current account in October recorded a surplus of $ 11.6 billion. This is the largest surplus since September 2017 ($ 12.34 billion), which is the third largest ever. The current account is a statistic that summarizes all economic transactions such as capital and labor, along with the import and export of goods and services between countries.

The commodity balance was $ 10.15 billion, surpassing $ 10 billion after last month. Exports fell to $ 4.79 billion from the previous year ($ 49.120 million) and the previous month ($ 497.60 billion), but on an average daily basis they increased. It was semiconductors and cars that led the export. As for customs clearance, semiconductor exports increased by 10.2% compared to a year ago and automobiles by 7.1%. Imports were $ 3.84 billion, the decline from the previous year ($ 41 billion) was greater than that of exports. This is the impact of the price of raw materials such as crude oil (import price -32.8%), coal (-23.4%) and gas (-50.6%).

The services balance registered a deficit of $ 660 million. Compared to the previous year ($ 172 billion) and the previous month ($ 240 million), the deficit has significantly decreased. In the aftermath of the new coronavirus infection (Corona 19), the entry and departure routes were still blocked and the travel balance was $ 470 million, similar to the previous month ($ 430 million). However, the transportation account surplus of $ 440 million. This is because maritime and port transport revenues have increased due to improved trade. Both container and air freight rates in October almost doubled from a year ago.

The main income balance, which reflects the flow of wages, dividends and interest, was $ 2.45 billion, up sharply from the previous year ($ 1.83 billion) and the previous month ($ 610 million) . The main context is that dividends and interest income from investments in securities have increased, mainly for institutional investors, while the payment of dividends from direct investments has decreased.

Net assets of financial accounts representing capital outflows increased by $ 15.94 billion. Compared to the previous year ($ 10.24 billion) and the previous month ($ 8.91 billion), this is a significant increase. Direct investment increased by $ 150 million and equity investments increased by $ 260 million. Among investments in securities, investment in foreign securities by residents increased by $ 4.18 billion, an increase for seven consecutive months. Foreign investment in domestic securities increased by $ 3.92 billion.