S.Korea Aug current account logs biggest deficit in over two years

SEOUL -South Korea's current account swung to the red by the biggest margin in more than two years in August, driven by high energy prices, central bank data showed on Friday.

The country's current account balance logged a provisional $3.05 billion deficit in August, following a $0.79 billion surplus in July, according to the Bank of Korea (BOK).

It was the first monthly shortfall since April 2022 and the biggest since April 2020. Excluding the month of April, when a seasonal factor affects local companies' annual dividend payments to overseas investors, it was the largest deficit since January 2011.

The breakdown showed the balance of goods and services stood at a $4.45 billion deficit and a $0.77 billion deficit, respectively, while some of the outflow was offset by a $2.17 billion surplus in income.

The BOK said the deficit was mainly due to the unusually large trade deficit in August and the balance is likely to swing back to a surplus in September, when the trade deficit narrowed to $3.77 billion from a record-high of $9.49 billion a month earlier.

The current account is expected to post a surplus for the whole of this year, but volatility will remain high on a monthly basis with high prices for energy imports and increasing demand for overseas travel, it added.

The current account recorded a cumulative $22.52 billion surplus from January to August, compared with $56.90 billion for the same period a year ago.