South Korea in April saw its largest current account deficit in nearly a decade, with the COVID-19 pandemic dealing a blow to the nation’s trade, data from the central bank showed Thursday.
The export-reliant economy suffered a current account deficit of $3.12 billion, marking the largest amount since January 2011 when the corresponding figure stood at $3.16 billion, the Bank of Korea said.
The figure also marked the first current account deficit in nearly a year, as the nation had maintained an account surplus from May 2019 to March this year.
The transition to the current account deficit was caused by a sharp decline in the country’s goods account surplus, which slipped to $820 million from $6.66 billion on-month in April. The figure -- which reflects the difference between exports and imports of goods -- marked the lowest since April 2012, when the country saw a deficit of $330 million.
Its exports fell 24.8 percent on-year to $36.4 billion in April, the lowest since February 2010, when the figure came to $31.3 billion. Imports, meanwhile, slipped 16.9 percent to $35.6 billion in the same period, implying that the country’s exports have been shrinking at a faster rate than imports.
The service account deficit rose to $1.42 billion from $1.39 billion on-month, while the tourism account deficit narrowed to $340 million from $370 million on-month and $440 million on-year.
Despite risks from the novel coronavirus still lingering over the economy, the BOK painted a rosy outlook for May, saying that the current account balance will bounce back into surplus soon, based on data.
“Fortunately, the trade balance in May shows a surplus, which will hopefully push back the account into the black as well,” said Moon So-sang, head of the BOK’s monetary and financial statistics division.
By Jung Min-kyung (firstname.lastname@example.org