South Korea's current account surplus hit the new record monthly high last month due to faster growth in exports than imports, central bank data showed Friday.
Current account surplus reached 6.88 billion U.S. dollars in November, marking the largest in the country's history and up from a revised surplus of 5.78 billion dollars tallied in the previous month, according to the Bank of Korea (BOK).
The current account balance maintained its surplus trend for 10 straight months through November due to faster expansion in exports than imports, indicating that the South Korean economy may begin to escape from the so-called recession-type surplus.
For the first 11 months of this year, the surplus amounted to 40.97 billion dollars, up from 23.28 billion dollars in the same period of last year. The current account balance is the broadest measure of international trade and investment income.
Exports, which account for around half of the South Korean economy, jumped 5.9 percent on-year to 49.63 billion dollars in November. The on-year growth continued to accelerate to 5.9 percent in November from 3.8 percent in October and 0.6 percent in September.
Demand for locally-made chips, telecommunication devices and display panels widened its growth, and shipment of steel products and automobiles turned around last month. Ship exports continued to decline amid the sluggish shipbuilding industry.
Imports increased 0.6 percent on-year to 42.87 billion dollars last month. The growth pace in imports was faster than the prior month's 0.5 percent, but it was much lower than the export expansion, contributing to the record high of current account surplus.
Helped by faster growth in exports than imports, the goods account balance logged a surplus of 6.75 billion dollars in November, up from 5.17 billion dollars in the previous month.
The service account, which measures the flow of travel, transport costs and royalties, logged a deficit of 50 million dollars in November, shifting from a surplus of 380 million dollars in the previous month. The shift was attributed to an increase in intellectual property rights payment and a rise in travel account deficit.
The primary income account, including monthly salaries and investment income, registered a surplus of 370 million dollars last month, down from a surplus of 520 million dollars in October due to a reduction in interest incomes.
The financial account, which gauges cross-border investment, recorded an outflow of 9.85 billion dollars in November, up from an outflow of 7.25 billion dollars in the prior month, according to the BOK. For the first 11 months of this year, the account logged an outflow of 40.29 billion dollars.
Net outflow in direct investment widened to 1.34 billion dollars in November from 980 million dollars in October as local residents increased overseas direct investment.
Portfolio investment, including stock and bond investment, logged a net outflow of 3.88 billion dollars last month, down from a net outflow of 4.66 billion dollars for October. The decrease was attributed to foreign investors who bought more local bonds last month.
Other investment account, including trade credit and foreign debts, marked a net outflow of 2.69 billion dollars in November, sharply up from an outflow of 20 million dollars a month before. Local financial institutions reduced repayment of foreign debts, but an outflow related to trade credit rose sharply, the BOK said.