South Korea records current account surplus for 22 months

South Korea maintained the current account surplus trend for 22 straight months last month, but the figure reduced compared with the prior month due to seasonal factors, central bank data showed Monday. Current account surplus reached 6.03 billion U.S. dollars in November, down from 9.51 billion dollars in October and 7.54 billion dollars in the same month of last year, according to the Bank of Korea (BOK). The October figure was the largest in the country's history. The central bank said that the surplus tends to reduce in November every year as companies usually make a high payment in the service sector such as intellectual property rights and business services. For the first 11 months of this year, the cumulative surplus amounted to 64.3 billion dollars, exceeding the BOK's forecast of 63 billion dollars for 2013 and the existing record annual high of 48.08 billion dollars tallied in 2012. Exports, which account for around half of the economy, fell 1.9 percent from a year earlier to 48.81 billion dollars in November due to sluggish demand from Japan on the weakening yen that boosted price competitiveness of Japanese exporters. Imports slid 0.2 percent on year to 42.63 billion dollars last month, sending the trade surplus for goods to 61.8 billion dollars in November, down from a surplus of 7.03 billion dollars in October. The service account balance, which measures the flow of travel, transport costs and royalties, turned into a deficit of 700 million dollars in November, from a surplus of 1.65 billion dollars in the prior month. The service account tends to worsen for the last two months of the year as companies should pay royalties imposed on the use of intellectual property right and business services ahead of the year-end. Surplus in primary income account, which includes monthly salaries and investment income, fell to 590 million dollars in November from 790 million dollars in October due to a decline in dividend income. Financial account, which gauges cross-border investment, posted an outflow of 6.33 billion dollars in November, down from an outflow of 10.09 billion dollars in the previous month. Net outflow in other investment account, including trade credit and foreign debts, dropped to 230 million dollars last month from 10.66 billion dollars in the previous month as local financial institutions reduced loans in foreign currency, while increasing foreign debts. Portfolio investment, including stock and bond transactions, posted an outflow of 1.41 billion dollars in November after registering an inflow of 4.5 billion dollars in October as foreign capital flowed out of the local stock market. Direct investment shifted into an outflow of 1.86 billion dollars in November, as against an inflow of 50 million dollars in the prior month.