Bank of Korea Announces April International Balance of Payments
Goods Balance Returns to Surplus After 7 Months
In April of this year, the current account recorded a deficit of $790 million, returning to a deficit after just one month. This was influenced by dividend payments to foreigners and an increase in overseas travel due to the easing of COVID-19 restrictions.
According to the provisional balance of payments for April released by the Bank of Korea on the 9th, the domestic current account recorded a deficit of $790 million. While there was a slight surplus of $130 million a year ago, this month showed a deficit.
The current account turned to a deficit in January this year, recording a historic high deficit of $4.21 billion since statistics began in 1980. It continued with a deficit of $520 million in February, then struggled to rebound with a surplus of $160 million in March, but returned to a deficit in April.
The goods balance recorded a surplus of $580 million. This marked a return to surplus after seven months since September last year.
Exports amounted to $49.11 billion, down $9.93 billion (16.8%) compared to the same month last year. Exports declined for eight consecutive months due to the global economic slowdown, with decreases in semiconductors, chemical products, and petroleum products.
In particular, semiconductors (customs basis -40.5%), petroleum products (-27.4%), steel products (-15.7%), and chemical products (-12.8%) showed weakness. By region, exports to Southeast Asia (-29.1%), China (-26.5%), Japan (-21.1%), and the United States (-4.4%) contracted.
Imports totaled $48.53 billion, down $7.38 billion (13.2%) from the same month last year. Imports of raw materials, capital goods, and consumer goods all decreased.
The services balance also recorded a deficit of $1.21 billion. The transportation balance turned to a surplus of $30 million.
The primary income balance recorded a deficit of $90 million. With increased dividends paid to foreigners, the dividend income balance showed a deficit of $550 million, turning to a deficit.
The net financial account, which is assets minus liabilities, decreased by $4.82 billion. In direct investment, domestic investors' overseas investment increased by $980 million, while foreign investment in the domestic market decreased by $740 million.
In securities investment, domestic investors' overseas investment increased by $1.75 billion, and foreign investors' domestic investment increased by $5.38 billion. Foreign investors' domestic stock investment turned to an increase due to easing global financial instability, and bond investment increased driven by arbitrage incentives.
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