South Korea current account surplus at 7-month high

SEOUL: South Korea's current account surplus rose to its highest level for seven months in May as dividend payments to foreign investors fell, official figures showed Tuesday.

The surplus, the broadest measure of trade with the rest of the world, was $2.26 billion last month compared to a revised $1.28 billion in April and $4 billion in May 2010, the Bank of Korea said.

"Despite a fall in the trade surplus, the overall current account surplus nearly doubled, helped by reduced payouts to foreign investors and a smaller travel deficit," the central bank said in a statement.

It was the 15th consecutive month that the current account had remained in the black, assisted by solid exports as the global economy recovers.

Tuesday's figure was expected further to bolster the won, which has risen about 4.5 percent this year against the dollar.

The goods account recorded a surplus of $1.71 billion in May, down from a revised $3.33 billion in April. Exports grew 23.6 percent year-on-year to $47.3 billion in May and imports expanded 31.7 percent to $45.6 billion.

Compared with the previous month, exports fell 1.27 percent while imports grew 2.27 percent. Fewer working days in May caused exports to decline while import bills rose due to higher oil prices.

The service account, which includes spending by South Koreans on overseas trips, recorded a surplus of $15.5 million last month compared to a shortfall of $178.8 million in April.

The primary income account, which records wages for foreign workers and dividend payments overseas, achieved a surplus of $517.3 million last month compared with a deficit of $1.58 billion in April.

Overseas investors usually repatriate dividend payments in March and April.

Copyright AFP (Agence France-Presse), 2011