Bloomberg News

South Korea Current-Account Surplus Widens to One-Year High

November 29, 2011

(Updates with economist’s comment in fourth paragraph.)

Nov. 29 (Bloomberg) -- South Korea’s current-account surplus widened to a one-year high in October as exports withstood weakening global demand and imports declined.

The surplus was $4.23 billion, compared with a revised $2.83 billion in September, 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 central bank on Nov. 11 held off for a fifth month from raising borrowing costs, joining other Asian nations to support economic expansion as Europe’s deepening debt crisis roils global markets. The Organization for Economic Cooperation and Development said yesterday that its 34 member countries will grow 1.9 percent this year and 1.6 percent next, down from 2.3 percent and 2.8 percent predicted in May.

“The overall global business environment is worsening and uncertainty is increasing,” Lee Sang Jae, a senior economist at Hyundai Securities Co. in Seoul, said before the release. “The central bank may have to consider a rate cut sooner or later.”

The won gained for the first time in seven days yesterday, strengthening 0.9 percent to 1,154.35 per dollar in Seoul, according to data compiled by Bloomberg. The Kospi Index rose 2.2 percent.

The surplus on traded goods was $3.65 billion last month from a revised $2.1 billion in September, today’s report showed.

Total exports on a customs-cleared basis rose to $46.8 billion in October from $46.6 billion, driven by cars and ships, according to today’s statement. Imports declined to $42.8 billion from $45.3 billion on less demand for capital goods such as machinery and equipment.

Overseas shipments probably rose 10.4 percent in November from a year earlier after an 8 percent gain last month, according to the median forecast of 13 economists surveyed by Bloomberg News.

--Editors: Nerys Avery, Lily Nonomiya

To contact the reporter on this story: Eunkyung Seo in Seoul at eseo3@bloomberg.net;

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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