S. Korea posts 4th-largest current account surplus in 2010

   South Korea's current account surplus widened in December from the previous month on robust exports, with the country posting its fourth-largest ever surplus last year, the central bank said Thursday.

   The current account surplus reached $2.11 billion in December, up from $1.93 billion the previous month, according to the Bank of Korea (BOK). The current account is the broadest measure of cross-border trade.

   The current account remained in the black for the 10th straight month on the back of robust exports, which account for about 50 percent of the Korean economy.

   For the whole year of 2010, South Korea logged a current account surplus of $28.21 billion, down from $32.79 billion the previous year and marking its fourth-largest ever surplus. But the 2010 numbers missed the bank's previous full-year target of $29 billion.

   South Korea extended its current account surplus run to a 13th straight year in 2010 as overseas shipments of locally made

products remained brisk amid the global recovery.  

   The BOK forecast that the country is expected to see another monthly surplus for January on the back of strong exports.

   "Although rising oil prices are jacking up imports, exports of ships, autos and other key products remain brisk, which will lead Korea to see the surplus run for January," Lee Young-bog, head of the BOK's balance of payments statistics team, said at a press conference.

   Lee said the size of the 2010 surplus was slightly smaller than the bank's earlier estimate mainly because the payout of interim dividend increased more than expected in November.

   South Korea extended its current account surplus run to a 13th straight year in 2010 as overseas shipments of locally made products remained brisk amid the global recovery.

   The surplus is widely expected to bolster the local currency, which has risen about 1.7 percent to the U.S. dollar so far this year.

   South Korea's goods balance posted a surplus of $3.68 billion in December, up from a revised $3.17 billion the previous month.

Exports rose 24 percent on-year to $34.8 billion last month, and imports gained 21 percent to 326.2 billion.

   For 2010, the goods balance posted the second-largest surplus ever with $41.9 billion, up from $37.87 billion in 2009, aided by robust exports of semiconductors and other key products.

   A shortfall in the service account, which includes outlays by South Koreans on overseas trips, widened to $1.15 billion in December, larger than a $304.5 million deficit the previous month.

   Meanwhile, the capital and financial account, covering cross-border investments, posted a net outflow of $336.2 million in December, compared with a net outflow of $2.19 billion in November.

   Last year, the account of portfolio investment including bond and stock investment posted a net inflow of $38.55 billion, smaller than $49.73 billion in the previous year, as foreign investors slowed their investment in local securities. But the 2010 readings marked the second-largest ever net inflow, the BOK added.

   On Dec. 10, the BOK revised down its projection for the current account surplus to $18 billion for 2011, from $29 billion this year, as imports will likely pick up. (Yonhap News)