S. Korea Current Account Surplus to Top $1 Billion

By Seyoon Kim

Nov. 28 (Bloomberg) -- South Korea's current account surplus will top more than $1 billion in November and remain in surplus in 2009, Finance Minister Kang Man Soo said.

“The current account turning to a surplus provides us a basis to better manage the difficult times,” Kang said at a weekly government meeting in Gwacheon today. “We're likely to see a November current account surplus of more than $1 billion and a similar amount next month.”

South Korea posted a record $4.91 billion current account surplus in October, a report showed yesterday, which may help ease pressure on the won, Asia's worst-performing currency this year. The won has tumbled to near a decade low as foreign investors dump emerging market assets amid the global economic and financial crisis.

South Korea has posted current account shortfalls every month but two this year as high oil prices and the weaker won drove up the cost of imported goods.

The government on Nov. 3 pledged to spend 14 trillion won ($9.6 billion) in 2009 to buoy the economy. The stimulus package will add 1 percentage point to economic growth, which is at risk of falling below 3 percent in 2009 if global conditions deteriorate, according to a government estimate. Kang said today the government spending would be directed at creating jobs.

Kang said on Nov. 21 the nation's economic growth may slow to “about 2 percent” next year. UBS AG said the same day South Korea's economy will shrink 3 percent in 2009, the first contraction since the country's financial crisis in 1998.

The Bank of Korea said yesterday it will receive $4 billion from the Federal Reserve, using its currency-swap line for the first time to provide U.S. dollars to local banks struggling to secure foreign funds.

To contact the reporter on this story: Seyoon Kim in Seoul at Skim7@bloomberg.net