International investment banks estimate Korea may have posted a current account surplus for February due mainly to its global market competitiveness, a report showed Friday.
According to the report by the Korea Center for International Finance, Barclays Capital, Morgan Stanley and Deutsche Bank all assessed Korea’s current account balance to have shifted back into the black last month from a deficit of around $800 million in January.
The January deficit marked the first time in two years the monthly current account fell into the red. The current account is the broadest measure of cross-border trade.
“January‘s deficit was attributed by investment banks as being caused by seasonal factors like the lunar new year holiday that affected work days and exports,” the KCIF said.
While rising oil prices and sluggish economic growth overseas will reduce the country’s surplus, the investment banks believed South Korea enjoyed export competitiveness that would help its balance of trade.
Korea posted a trade surplus of $2.20 billion in February, a turnaround from the $2.03 billion deficit tallied for the previous month.
The banks also stated Seoul possessed sufficient foreign reserves to cope with worldwide financial crises.
They did, however, express concern about the country‘s upcoming parliamentary and presidential elections slated for April and December.
The KCIF, jointly set up by the Bank of Korea and the government, said political instability ahead of the critical elections can exert negative influence on domestic consumption and the economy as a whole. (Yonhap News)
