February Current Account Deficit of $520 Million... Deficit for Two Consecutive Months (Update)

Trade Balance Deficit for 5 Consecutive Months

Due to the global economic slowdown, exports of key products such as semiconductors have declined, resulting in a current account deficit for two consecutive months in February this year.

According to the preliminary balance of payments data for February released by the Bank of Korea on the 7th, the domestic current account recorded a deficit of $520 million. This is a decrease of $6.38 billion compared to a surplus of $5.87 billion a year ago.

The goods balance shifted from a surplus of $4.35 billion in the same month last year to a deficit of $1.3 billion.

The current account turned to a deficit in August last year (-$2.9121 billion), then recorded a surplus of $2.089 billion in September. In October, it posted a surplus of $1.6297 billion for two consecutive months, avoiding a deficit, but returned to a deficit in November (-$222.8 million) before switching back to a surplus in December. In January this year, it recorded a deficit of $4.21 billion, the largest deficit since statistics began in 1980, and continued the deficit in February.

By detailed items, the goods balance showed a deficit for five consecutive months. It turned to a deficit with a decrease of $5.65 billion compared to the same month last year.

Exports amounted to $50.52 billion, down $3.38 billion (6.3%) from the same month last year. Exports declined for six consecutive months due to the global economic slowdown, with decreases in semiconductors and chemical products. In particular, semiconductors (customs basis -41.5%), steel products (-9.2%), and chemical products (-9.8%) showed weakness. By region, exports to Southeast Asia (-25%), China (-24.3%), and Japan (-5.4%) contracted.

Imports totaled $51.82 billion, up $2.27 billion (4.6%) from the same month last year. Imports increased due to a rise in raw materials, despite decreases in capital goods and consumer goods imports.

The services balance recorded a deficit of $2.03 billion as the transportation balance turned to a deficit. The services balance turned to a deficit with a decrease of $2.12 billion compared to the same month last year. The transportation balance also recorded a deficit of $220 million, decreasing by $1.64 billion compared to the same month last year, turning to a deficit.

The primary income balance recorded a surplus of $3.12 billion, with the surplus increasing by $1.56 billion compared to the same month last year. Among the primary income balance, the dividend income balance surplus ($2.35 billion) increased by $1.62 billion over the year.

The net financial account, which is assets minus liabilities, increased by $119 million. In direct investment, domestic investors' overseas investment increased by $3.66 billion, and foreign investors' domestic investment increased by $360 million.

[Image source=Yonhap News]

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