S. Korea posts biggest services account deficit on falling Chinese tourists

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South Korea posted the biggest-ever services account deficit in the first half of this year as a falling number of Chinese tourists visiting the country led to a surge in the travel account deficit, central bank data showed Thursday.

Services account balance, which measures the flow of travel, transport costs and royalties, logged a deficit of 15.74 billion US dollars in the January-June period, according to the Bank of Korea (BOK).

It was up from a deficit of 9.78 billion dollars in the previous six-month period, marking the largest-ever recorded by the economy.

People walk through the popular Myeongdong shopping district in Seoul on April 25, 2017. /AFP Photo

The travel account deficit more than doubled at 7.74 billion dollars in the first half, compared with 3.5 billion dollars tallied a year earlier. It was the second-biggest figure in history.

Chung Kyu Il, director general of the BOK's economic statistics department, told a press briefing that the number of Chinese tourists visiting South Korea tumbled, while the number of South Koreans traveling abroad jumped.

The number of Chinese tourists visiting the country was 255,000 in June, down 66.4 percent from a year ago.

The transport account deficit logged a record high of 2.28 billion dollars in the first half due to slump in the global shipping industry and the continued effect from the bankruptcy in February of Hanjin Shipping, the country's former No.1 shipping company.

Shoppers walk through the Myeongdong district of Seoul on May 18, 2017. /AFP Photo

Affected by the record-high services account deficit, the current account surplus for goods and services plunged to 36.27 billion dollars in the first half from 51.69 billion dollars a year earlier.

In June alone, the current account surplus was 7.01 billion dollars.

The current account balance, the broadest measure of trade in goods and services, stayed in black for 64 months through June, keeping the country's longest monthly surplus.

Current account surplus for goods amounted to 58.35 billion dollars in the first half. It was down 6.6 percent from a year ago, but it was the second-biggest figure ever recorded in the first half.

The view over the Namsan tower above central Seoul. /AFP Photo‍

Primary income account, which gauges investment and interest income as well as salary, was a deficit of 4.04 billion dollars in the first half, more than four times 910 million dollars registered a year ago. It was attributable to domestic companies paying dividend to foreign investors.

Financial account, which measures cross-border capital flow without transactions in goods and services, registered an inflow of 32.69 billion dollars in the first half.

Overseas direct investment by locals reached 17.41 billion dollars, while domestic direct investment by foreigners amounted to 7.13 billion dollars.

Locals invested 42.37 billion dollars into overseas stocks and bonds, while foreigners bought domestic stocks and bonds worth 23.13 billion dollars.

(Source: Xinhua)

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