South Korea last month posted its first current account deficit in seven years, authorities said yesterday, as the export-dependent economy grapples with headwinds from the US-China trade dispute.
The world’s 11th-largest economy posted a current account deficit of US$660 million last month, figures from the Bank of Korea showed.
A country’s current account is a broad measure of its trade with the rest of the world, including goods, services, and payments made and received.
South Korea’s trade surplus plunged to US$5.67 billion from US$9.62 billion a year earlier with the US and China at loggerheads over commerce.
Beijing is Seoul’s largest trading partner, absorbing a quarter of its exports.
Crucial semiconductor exports fell 12.7 percent amid sagging global demand for memory chips and intensifying market competition.
At the same time dividend payments overseas leaped to US$6.78 billion, the second-highest level in the nation’s history.
Many South Korean companies pay dividends in April and officials said the current account deficit — the first since April 2012 — was due to seasonal factors.
The data came a day after the Bank of Korea reported the economy shrank 0.4 percent quarter-on-quarter in the first three months, 0.1 percentage points lower than its earlier estimate.
It was the South’s largest contraction since a 3.3 percent drop in late 2008 at the height of the global financial crisis.
South Korea’s GDP grew 2.7 percent last year, the weakest pace in six years.
The trade spat between Beijing and Washington has hurt global growth prospects, hitting export-reliant Asian nations as China’s economy reels from US tariffs on billions of dollars in Chinese goods.
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