Korea suffers first deficit in 23 months in Jan.

Korea suffers first deficit in 23 months in Jan.

A fleet of cars are loaded onto ships at Incheon Port in this file photo. South Korea recorded a current account deficit in January for the first time in nearly two years due to slumping exports amid the eurozone debt crisis and seasonal factors. / Korea Times file By Kim Tae-jong The nation posted a current account deficit in January for the first time in 23 months due to slumping exports amid the eurozone debt crisis and seasonal factors, the central bank said Tuesday. According to the Bank of Korea (BOK), the nation recorded a current account deficit of $770 million, a major departure from a surplus of $2.81 billion the previous month. In comparison, the nation posted a current account surplus of $150 million a year earlier. It is the first time for the nation to see a current account deficit since February 2010, when the deficit stood at only $550 million. The deficit has fueled concerns over the nation’s economy as it is a barometer for cross-border trade. The BOK cited the decline in exports and a sharp rise in imports of commodities including crude oil as the main reasons for the reverse. In terms of goods, the nation posted a deficit of $1.42 billion, shifting from a surplus $1.56 billion a year earlier. Exports showed a drop of 7 percent to $41.3 billion from a year earlier, while imports rose 3.3 percent to $43.4 billion. The decline in exports was led largely by the drop in sales of ships and mobile communications equipment, which plunged 43.7 and 30.7 percent, respectively, the BOK said. In addition, the eurozone crisis and unstable U.S. economy affected overall exports in the two major markets, it added. Some predict the nation may suffer from a deficit for the second month in a row but the BOK said the decline is a temporary phenomenon, saying January tends to be a month when the nation sees a decline in exports right after a massive increase at the end of the previous year. “We expect a current account surplus in February,” a BOK official said. “We have seen an increase in exports of cars and steel, and we have more working days this month as the long Lunar New Year holiday was in January.” Meanwhile, in terms of the capital and financial accounts, covering cross-border investments, the country posted a net inflow of $1.22 billion in January, shifting from a net outflow of $3.5 billion the previous month, the central bank said. Thanks to eased concerns over the eurozone crisis, foreign investors turned to buying local stocks and bonds last month, the BOK said