Feb. 28 (Bloomberg) -- South Korea posted its first current-account deficit in nearly two years as exports dropped due to Europe’s debt crisis and the Lunar New Year holiday.
The deficit was $772.2 million in January, the first shortfall since February 2010, compared with a revised surplus of $2.8 billion in December, the Bank of Korea said in a statement in Seoul today. The current account is the broadest measure of trade, tracking goods, services and investment income.
Signs of an improving U.S. economy and progress toward a Greek bailout have cut external risks for Asia’s fourth-largest economy while rising oil prices pose a fresh threat, Finance Minister Bahk Jae Wan said last week. The Bank of Korea kept its benchmark interest rate unchanged for an eighth month on Feb. 9, the longest pause since tightening began in July 2010.
“Korea’s trade account should post a deficit in the first quarter, suggesting negative GDP growth for the quarter,” Kwon Young Sun, a Hong Kong-based economist at Nomura Holdings Inc., said before the release. “But this should be temporary as we expect a modest recovery in global demand in the second half.”
The won weakened 0.3 percent to close at 1,129.24 per dollar in Seoul yesterday, according to data compiled by Bloomberg. The Kospi Index lost 1.4 percent.
The country posted a deficit of $1.4 billion on traded goods after a revised surplus of $2.7 billion in December, today’s report showed.
Total exports on a customs-cleared basis fell to $41.4 billion in January from $47.7 billion in December, according to today’s statement. Imports declined to $43.4 billion from $45.5 billion.
Overseas shipments may rise 17.5 percent in February from a year ago, according to a median estimate of 12 economists surveyed by Bloomberg ahead of a March 1 report on exports.
The BOK forecast in December that the economy will grow 3.7 percent in 2012 and 4.2 percent in 2013. The country’s current-account surplus is expected to narrow to $13 billion this year from $26.5 billion in 2011, according to the projections.
-- Editors: Iain Wilson, Brendan Murray
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