S Korea's current account grows 23.1% in June, export drops

30 July 2013 03:50  [Source: ICIS news]

SINGAPORE (ICIS)--South Korea’s current account surplus grew by 23.1% year on year to $7.24bn (€5.43bn) in June this year, despite a drop in exports and industrial output, official data showed on Tuesday.

The current account measures an economy’s trade in goods, services, tourism and investment with the rest of the world.

The gain in June marks the 17th consecutive month of a current account surplus for South Korea.

The country’s exports fell by 3% year on year to $45.4bn in June, while imports were down by 3.6% at $40.3bn, the Bank of Korea (BOK) said in a statement.

“The downside risk will mainly come from the export outlook, in our view,” said Singapore-based DBS Group Research.

“While the latest Eurozone PMI [purchasing managers’ index] has finally returned to the 50 mark and the US economy has remained in expansionary mode, the further contraction of China’s PMI in July is certainly a concern,” it added.

The EU and US typically account for a combined share of around 20% in South Korea’s monthly overall exports, while China and Hong Kong also contribute a large share of about 30%.

Meanwhile, the country’s industrial output fell by 2.6% in June after a revised 1.3% decrease in May, data from Statistics Korea showed.

For the first six months of this year, South Korea posted a current account surplus of $29.8bn, more than double the $13.8bn reported in the same period a year earlier.

Its exports was up by 2.3% year on year in January-June this year at $279.7bn, while imports were down by 2.95% at $254.5bn.

South Korea’s petrochemical exports rose by 7.7% year on year to $24.5bn in 1 January-20 June this year, while overseas shipments of petroleum products slipped by 2.1% to $26.6bn, according to earlier data from the Ministry of Trade, Industry and Energy (MTIE).

“Despite sluggish exports to Japan and the European Union due to a weak Japanese yen and the European financial crisis, outbound shipments to emerging economies such as China and the ASEAN region posted strong growth,” the MTIE said.

($1 = €0.75)

By: Nurluqman Suratman

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