(Updates with economist comment in fourth paragraph.)
June 28 (Bloomberg) -- South Korea’s current-account surplus widened to seven-month high in May as car and steelmakers boosted overseas shipments and dividend payments to foreign shareholders shrank.
The surplus was $2.26 billion, compared with a revised $1.28 billion in April, the Bank of Korea said in a statement in Seoul today. The current account is the broadest measure of trade, tracking goods, services and investment income.
South Korea’s exports have climbed at a double-digit pace since November 2009 and hit a record in April even as the won appreciated. A slowdown in U.S. growth and the fallout from Europe’s sovereign debt crisis risk weighing on shipments.
“The talk of a soft patch in the global economy should bode ill for exporters,” Kong Dong Rak, a fixed-income analyst at Taurus Investment & Securities Co. in Seoul, said before the release.
The won dropped 0.6 percent to 1,085.63 per dollar as of the 3 p.m. close in Seoul yesterday, according to data compiled by Bloomberg. The currency has gained about 3.7 percent so far this year, more than most of its Asian peers. The Kospi share index fell 1 percent.
The stronger won may help ease inflation pressure, which the Bank of Korea has tried to contain by raising interest rates three times this year.
Total exports on a customs-cleared basis rose 22.4 percent last month from a year earlier, compared with a revised 23.7 percent gain in April, according to today’s statement. Imports climbed 30.3 percent after expanding a revised 24 percent in April.
Kia Motors Co. reported a 30.5 percent rise in its overseas sales by volume last month from a year ago while shipments abroad of steel products by POSCO and other steelmakers increased 34.9 percent on global demand.
Overseas shipments probably rose 17.6 percent this month, the smallest gain in four months, according to the median forecast of 12 economists surveyed by Bloomberg News. The latest monthly trade data will be released on July 1.
The central bank raised the benchmark interest rate to 3.25 percent this month, the third advance this year, to respond to inflation exceeding its target since January and record household debt. Governor Kim Choong Soo’s policy board meets July 14 to decide whether to raise borrowing costs again.
The surplus on traded goods narrowed to $1.71 billion last month from a revised $3.33 billion in April, today’s report showed. The services account, which measures the flow of travel, transport costs and royalties, posted a surplus of $15.5 million in May, compared with a revised deficit of $179 million in April.
--Editors: Ken McCallum, Paul Panckhurst
To contact the reporters on this story: Eunkyung Seo in Seoul at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Panckhurst at email@example.com