July 7, 2022

South Korea continued to log a current account surplus in October, for the 18th straight time. Bank of Korea recorded the surplus to be rather smaller than the previous month over increased imports amid high energy and raw material prices.

According to preliminary data by the Bank of Korea, the current account surplus in October came to $6.95 billion, down from $10.07 billion a month earlier. The decline in the surplus compared with the previous month has been due to increased imports, driven by rising other commodity and oil prices.

Current account surplus data –

• In October, the goods balance measuring inbound and outbound shipments registered a surplus of $5.64 billion.
• However, the above amount was smaller than the previous month’s surplus of $9.45 billion.
• In the same month, exports came to a total of $55.97 billion, the 12th straight month of on-year rise.
• Imports in October came to $50.34 billion, up from the previous month’s $46.98 billion.
• In the reporting month, the service account posted a surplus of $630 million, from a deficit of $20 million from the previous month.
• In the same month, revenue from transport rose to $4.77 billion due to a hike in shipping rates.
• In October, the primary income account, which tracks wages of foreign workers and dividend payments overseas, logged a surplus of $670 million, down from a surplus of $750 billion a month earlier due in part to an increase in dividend payments.
• The capital and financial account, which covers cross-border investments, posted a net inflow of $7.01 billion in the reporting month, down from a net inflow of $9.78 billion in September.

In other news, the government has announced that it will implement eased capital gain taxes on property sales for single-home owners starting this week. The move comes ahead of the presidential election amid the country’s growing public discontent over real estate-related tax burdens.

The National Assembly last week had approved a revision to the income tax act that calls for raising a threshold of capital gains tax exemptions on real estate sales for single-house owners to 1.2 billion won (US$1 million).

According to the finance ministry, the government approved the act in a Cabinet meeting and will circulate it on Wednesday.