South Korea’s current-account surplus fell in April as demand for the nation’s electronics and cars was capped by a deepening euro region crisis.
The surplus was $1.8 billion, compared with a revised $2.97 billion in March, 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.
Manufacturers’ confidence has retreated in Asia’s fourth- largest economy as a slowdown in China and the debt crisis in Europe constrain export demand. The Organization for Economic Cooperation and Development last week cut South Korea’s growth outlook for this year to 3.3 percent, down from a 3.5 percent.
“Trade figures are likely to worsen given the worsening European debt crisis and a slowdown in China,” Kim Hyeon Wook, an economist at SK Research Institute, said before the release. “The won is set to weaken against the dollar should export deteriorate further in May.”
The Korean currency fell to a seven-month low last week amid doubts Europe will succeed in containing its debt crisis. The currency gained 0.9 percent to close at 1,174.82 per dollar in Seoul yesterday, snapping three consecutive weeks of losses, according to data compiled by Bloomberg.
The surplus on traded goods was $1.8 billion last month compared with a revised $2.9 billion surplus in March, today’s report showed.
Total exports on a customs-cleared basis fell to $46.2 billion in April from $47.4 billion in March, according to today’s statement. Imports were at $44.1 billion, compared with $45 billion in March.
Overseas shipments fell 1.1 percent in May from a year earlier, the third straight decline, according to the median estimate of 14 economists in a Bloomberg News survey.
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