Korea’s current account surplus hits 6-year low

Korea’s current account surplus hits 6-year low. August. 04, 2018 07:22. by Lee Sae Saem iamsam@donga.com.
South Korea’s tourism deficit increased to the second highest level ever on a half-a-year basis in the first half of this year. As a result, the nation’s current account surplus fell to the lowest level in six years.

The total number of tourists traveling among South Korea, China and Japan topped 15 million per year, but if South Korea fails to improve its tourism infrastructure, it will hardly be able to address tourism deficit, with outbound travelers constantly outnumbering inbound travelers.

According to a preliminary tally of international balance of payment released on Friday by the Bank of Korea, South Korea’s current account surplus came to 29.65 billion U.S. dollars in the first half of this year, down 16.8 percent year on year. The surplus is the lowest amount since the first half of 2012 when the country posted a 10.86 billion dollar surplus.

South Korea’s tourism deficit in the first half of this year reached 8.5 billion dollars, the second highest level ever after the second half of last year (9.44 billion dollars). The number of Chinese tourists to South Korea stood at 380,000 in June, up about 130,000 from the same month of last year. However, the figure remains far lower than the level before the deployment of the THAAD missile defense system in South Korea when the number of Chinese tourists would hit 600,000 to 700,000 per month.

Analysts say that the current situation happens because Chinese tourists, who opted to visit other countries including Japan while they were effectively blocked from visiting South Korea due to conflict over THAAD, are still not returning to this country.