Current account surplus narrows in July on decreased trade surplus

South Korea's current account surplus slightly narrowed in July due to reduced trade surplus, although exports maintained strong growth, central bank data showed Tuesday.

The current account surplus reached $8.21 billion in July, narrowing from a surplus of $8.85 billion the previous month, according to the Bank of Korea (BOK). The current account is the broadest measure of cross-border trade.

Since the country logged a deficit of $3.33 billion in April last year, the largest in almost a decade, on faltering exports amid the pandemic, the current account has stayed in the black.

South Korea posted a current account surplus for the 15th straight month in July.

In the first seven months of this year, the accumulative current account surplus amounted to $52.55 billion, compared with $26.06 billion for the same period last year.

A BOK official said the annual surplus may reach around $80 billion as the trend is expected to continue into the second half on brisk exports.

The goods balance logged a surplus of $5.73 billion in July, smaller than the surplus of $7.01 billion the previous month.

The service account, which includes outlays by South Koreans on overseas trips, logged a deficit of $80 million in July, compared with a shortfall of $950 million in May.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, logged a surplus of $2.8 billion in the month, bigger than a surplus of $1.69 billion in June.

Exports, which account for half of the South Korean economy, climbed 29.6 percent on-year in July on the back of brisk demand for chips and cars.

Outbound shipments came to $55.4 billion in July, extending their gains to the ninth consecutive month as the global economy maintained a recovery.

The monthly export volume marked the highest level since South Korea started compiling related data in 1956. The country's exports over the first seven months of 2021 came to $358.7 billion, also setting a fresh high. (Yonhap)