S Korea's current account switches back to deficit in January

Special Report:Global Financial Crisis

SEOUL, Feb. 27 (Chinese media) -- South Korea's current account posted a switch to

negative territory in January, first in four months, with exports hard struck by

global trade contraction, the Bank of Korea (BOK) said Friday.

The current account deficit logged 1.36 billion U.S. dollars in January, in

contrast with a surplus worth 860.8 million U.S. dollars the previous month,

according to a report by the BOK.

South Korea's current account measures good, service, and capital flows

into and out of the country, and had been marking a 3-month consecutive surplus

since last October.

The BOK attributed January's deficit to a sharp drop in global demand for

South Korean goods.

According to the report, the goods balance posted a deficit of 1.46 billion

U.S. dollars in January, compared with a 1.5 billion U.S. dollar surplus the

previous month, with plunging overseas demand and shorter working days due to

the Lunar New Year holiday.

Meanwhile, the service account marked a 708.5 million U.S. dollar deficit

in January, recovering from its earlier deficit of 1.52 billion dollars last

December, as the local currency's depreciation resulted in a trade-account

surplus.

The capital account also posted a net surplus of 4.86 billion U.S. dollars

in January, the first net inflow in five months thanks to banks' overseas

funding.

Analysts belittled the current account's fall to deficit, pointing to

seasonal factors as the main cause since the country usually sees a small

current account surplus or a shortfall in the first quarter for seasonal

reasons.

South Korea's Knowledge Economy Minister Lee Youn-ho said Thursday that

South Korea's trade surplus is to hit 3 billion U.S dollars in February largely

due to a sharp drop in imports.