South Korea Posts Eighth Current Account Surplus

By Saeromi Shin and Seyoon Kim

Oct. 28 (Bloomberg) -- South Korea posted a current account surplus for an eighth consecutive month in September after the nation sold more cars and semiconductor chips as overseas demand strengthened.

The surplus was $4.2 billion last month, compared with a revised $1.91 billion in August, the Bank of Korea said in Seoul today. The current account is the broadest measure of trade, tracking the flow of goods, services and investment income.

“The current account will remain in surplus in the coming months, thanks to exports,” said Kim Seung Hyun, head of research at Taurus Investment & Securities Co. in Seoul. “Still, the surplus may narrow as oil prices rise and imports may increase on the back of an economic recovery.”

South Korea’s economy expanded 2.9 percent in the third quarter from three months earlier, the fastest pace in seven years. Finance Minister Yoon Jeung Hyun said after the Oct. 26 report that full-year growth is possible in 2009.

The trade goods surplus was $5.45 billion in September from $3.33 billion in August, today’s report showed. Exports on a customs-cleared basis rose to $34.51 billion from a revised $28.96 billion in August.

The current account surplus will be about $3 billion in October and the full-year amount may reach “the latter part of the $30 billions range,” Lee Young Bog, a Bank of Korea statistics official, told reporters in Seoul today. In the first nine months, the surplus totaled $32.22 billion.

The central bank said in July that the nation will post a surplus of $29 billion this year. The gap may shrink to $7 billion in 2010, the bank said.

The nation’s benchmark Kospi stock index has gained 45 percent this year and the won strengthened 23 percent against the dollar in the past 12 months. The Kospi fell 1 percent at 9:28 a.m. in Seoul, and the won dropped 0.9 percent, to 1,195.15.

The services deficit, which measures the flow of travel, transport costs and royalties, was $1.63 billion in September, compared with $1.79 billion in August.

To contact the reporter on this story: Seyoon Kim in Seoul at skim7@bloomberg.netSaeromi Shin in Seoul at sshin15@bloomberg.net