South Korea posts current account deficit, first shortfall in seven years

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South Korea posts current account deficit, first shortfall in seven years

On Wednesday, the 5th of June 2019, South Korea, the 4th largest economy in Asia and 11th largest in the world, had posted its first current account deficit in seven years on last April due to an upsurge of its stock dividend payments amid lack of exports in context of a rattling trade war that had rapidly been leaning the world’s economy towards a recession.

Never the less, South Korean authorities had also added following their Wednesday’s (June 5th) statement that the troublesome gap remained in the black despite adjustment of several seasonal factors. According to South Korea’s Central Bank data, the nation’s current account balance had turned to negative in April after experiencing a revised surplus of $4.82 billion in March, remarking its first deficit since April 2012.

While South Korea had posted a current account deficit of 0.66 billion in April, dividends paid to foreigners had heightened to $6.78 bullion from $2.62 billion a month earlier, while trade surplus had contracted to $5.67 billon in April from $8.47 billion a month earlier over the narratives of rising geo-political worries.

Although the current balance could have posted a surplus of $3.36 billion in April on a seasonally adjusted basis, extending its streak of posing surplus for straight 85th month, the trade deficit would likely to widen further in the wake of residing over a thin red line between United States and China, while analysts had predicted later last week that South Korean might have to pick a side amid an escalated trade war between United States and China, which could further shrink its contracting economy.