S Korea records first current account deficit in 7 years

9th June, 2019 11:34:40 printer

SEOUL: South Korea saw its first current account deficit in seven years in April, authorities said Wednesday, as the export-dependent economy grapples with headwinds from the US-China trade war.

The world’s 11th largest economy posted a current account deficit of $660 million in April, figures from the central Bank of Korea showed, reports AFP.

A country’s current account is a broad measure of its trade with the rest of the world, including goods, services and payments made and received.

South Korea’s trade surplus plunged to $5.67 billion from $9.62 billion a year earlier with the US and China at loggerheads over commerce. Beijing is Seoul’s largest trading partner, absorbing a quarter of its exports.

Crucial semiconductor exports fell 12.7 percent amid sagging global demand for memory chips and intensifying market competition.

At the same time dividend payments overseas leaped to $6.78 billion, the second highest in the country’s history.

Many South Korean companies pay dividends in April and officials said the current account deficit — the first since April 2012 — was due to seasonal factors.

The data came a day after the Bank of Korea reported the economy shrank 0.4 percent quarter-on-quarter in the first three months, 0.1 percent lower than its earlier estimate.

It was the South’s largest contraction since a 3.3-percent drop in late 2008 at the height of the global financial crisis.

South Korea’s GDP grew 2.7 percent in 2018, the weakest pace in six years.