January Current Account Surplus of 1.01 Billion USD... 9 Consecutive Months of Surplus (Update)

Trade Balance Surplus Shrinks by $3.82 Billion Year-on-Year
Travel Deficit Narrows... January Arrivals Increase by 15.2% Year-on-Year

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The current account surplus in January recorded a surplus for nine consecutive months since May 2019. However, it showed a contraction compared to the same month of the previous year.

According to the 'January 2020 Balance of Payments (provisional)' statistics released by the Bank of Korea on the 5th, the current account surplus in January this year was $1.01 billion. Although it decreased compared to January last year ($3.31 billion), it marked a surplus for nine consecutive months since May last year.

The goods account surplus was $1.93 billion, down $3.82 billion from January last year ($5.75 billion).

Exports in January were $43.44 billion, down 12.3% compared to the same month last year. This marks the 14th consecutive month of decline. Imports also decreased by 5.2% year-on-year to $41.52 billion, continuing the downward trend for nine consecutive months.

Regarding the decline in exports, the Bank of Korea analyzed that the reduction in working days due to the Lunar New Year holiday and decreases in imports of raw materials, capital goods, and consumer goods were the causes.

The services account deficit was $2.48 billion, narrowing by $1.05 billion compared to the same month last year (a $3.53 billion deficit). The transportation account also recorded a deficit of $130 million.

The travel account deficit in January was $1.33 billion due to an increase in Chinese visitors. This is an improvement of $200 million compared to the $1.53 billion deficit in the same period last year.

The Bank of Korea analyzed that the travel account deficit narrowed because the number of arrivals, mainly Chinese visitors, continued to increase while the decrease in departures expanded. In fact, the number of Chinese arrivals in January increased by 22.6% year-on-year.

The primary income account surplus expanded from $1.68 billion in the same month last year to $1.69 billion due to increased dividend income. The secondary income account recorded a deficit of $130 million.

Meanwhile, looking at the financial account statistics, which show capital inflows and outflows excluding the current account, net assets (assets minus liabilities) increased by $2.55 billion in January.

In direct investment, domestic investors' overseas investment increased by $2.49 billion, and foreign investors' domestic investment also increased by $550 million.

In securities investment, domestic investors' overseas investment increased by $6.34 billion. Foreign investors' domestic investment increased by $5.92 billion.

The Bank of Korea stated, "Foreign stock investment turned to an increase due to improved investment sentiment following the US-China trade agreement, among other factors."

This content was produced with the assistance of AI translation services.