South Korea’s travel account deficit in March narrowed for the first time in 11 months with a rise in foreign visitors amid eased geopolitical risks on the Korean peninsula, but the country’s current-account balance received a setback from a spike in dividend payouts.
According to the preliminary balance of payments data released by Bank of Korea (BOK) on Friday, the nation’s travel account deficit was reduced to $1.31 billion, the lowest since April last year. The service account deficit, as a result, eased to $2.25 billion, the smallest since May last year.
The improvement coincides with the 10.7-percent growth in the number of foreign visitors to 1,366,000 in March against a year ago period. Compared to the previous month, it was up 30.7 percent. The sharp rise in foreign visitors is attributable to eased geopolitical tensions on the Korean peninsula alongside the 2018 Pyeongchang Winter Olympics where delegation and athletes from North Korea attended.
Also, Chinese visitors who had stayed away from Korea following Beijing’s ban on group tours to Korea in retaliation against Seoul’s host of U.S. anti-missile system are slowly returning to Korea. In March, 403,000 Chinese visited Korea, up 11.8 percent compared to a year earlier period. The number is expected to continue to rise, said a BOK official.
The current account surplus in March came at $5.18 billion to extend the surplus to the 73rd consecutive month. It was up compared to $3.96 billion in the previous month but down compared to $5.72 billion due to Korean Inc.’s record-high dividend payouts to foreign investors.
For the first quarter ended March, the current account surplus amounted $11.83 billion and logged the lowest quarterly figure since the second quarter of 2012, mostly due to fluctuation in global oil price.
By Kim In-oh and Cho Jeehyun
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