Tags: Korea | Current | Account | Surplus

South Korea's Current Account Surplus Hits Record High in 2009

Wednesday, 27 Jan 2010 08:20 AM

South Korea's current account surplus swelled to a record high in 2009, a big turnaround from a deficit the year before when foreign investors fled the country.

The country's broadest measure of trade and investment ended $42.67 billion in the black last year, the Bank of Korea said Wednesday.

The figure was an all-time high, said BOK statistics official Kim Sung-hwan.

South Korea had recorded a deficit of $5.78 billion in 2008, the first dip into the red in the current account since a shortfall of $8.29 billion in 1997 when the country was hit by the Asian financial crisis.

Investors in the country's stock market had been withdrawing funds from South Korea as the world economy slowed during 2008.

The global financial crisis later in the year added to the capital flight.

Propelling the turnaround in 2009 was a substantial widening in South Korea's goods trade surplus from $5.67 billion in 2008 to $56.13 billion last year, the central bank said in a statement.

Also, the capital and financial account recorded a net inflow in 2009 of $26.45 billion dollars, a big reversal from the previous year's net outflow of $50.08 billion dollars, according to the BOK.

South Korea's benchmark stock index slumped 40.7 percent in 2008 as foreign investors sold shares at a record pace. They returned in force in 2009, however, and the stock market surged 49.7 percent.

The Ministry of Knowledge Economy, which oversees commerce, reported earlier this month that South Korea's trade surplus hit an all-time high in 2009 of $41 billion. Trade recovered from a deficit of $13 billion in 2008, also the country's first since 1997.

The current account statistics came a day after the Bank of Korea announced that South Korea's economic growth sputtered to a near halt in the final three months of 2009 following vigorous expansions the previous two quarters as exports and consumer spending shrank.

Gross domestic product grew 0.2 percent in the three months ended Dec. 31 compared with the previous quarter, the central bank said Tuesday. GDP had expanded 3.2 percent in the third quarter, the strongest performance in more than seven years.

Economists shrugged off the latest number largely as a necessary correction and said South Korea — Asia's fourth-largest economy — is likely to grow close to 5 percent this year from 2009's 0.2 percent annual gain.

Kwon Goohoon, economist at Goldman Sachs in Seoul, said the economy is expected to grow 4.8 percent in 2010 on strong exports, a recovery in capital spending and restocking of inventories.

"We expect sustained global economic growth to help boost demand for Korean exports," he wrote in a report Tuesday.

He also said that the weaker-than-expected economic growth in the fourth quarter means that the central bank will not raise its key interest rate from a record low 2 percent until the third quarter.

© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 
1Like our page
2Share
Economy
South Korea's current account surplus swelled to a record high in 2009, a big turnaround from a deficit the year before when foreign investors fled the country. The country's broadest measure of trade and investment ended $42.67 billion in the black last year, the Bank of...
Korea,Current,Account,Surplus
474
2010-20-27
Wednesday, 27 Jan 2010 08:20 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved