South Korea’s current account balance in the service sector hit a record low in October, due to the soaring number of overseas trips during the long Chuseok holiday and a drop in the number of Chinese tourists here, central bank data showed Tuesday.

The services account deficit widened in October to a record $3.53 billion from the $1.79 billion deficit a year earlier, according to preliminary data released by the Bank of Korea. The previous record was $3.34 billion observed in January this year.

 

Of the monthly deficit, the travel sector accounted for $1.67 billion, marking the second-largest figure in the red.

While the number of outbound overseas travelers soared by 19.6 percent in October to some 2.23 million, especially during the 10-day national holiday, the monthly number of foreign visitors dropped 26.6 percent on-year to 1.17 million. The figure for Chinese inbound travelers showed a 49.3 percent fall from the same period last year.

Earlier this year, Beijing had imposed restrictions on South Korean imports and banned Chinese group tours, as part of economic retaliation against Seoul’s decision to deploy an advanced US missile defense system on the peninsula. The bilateral tension was alleviated in late October.

Despite the faltering travel sector, the country’s monthly current account surplus totaled $5.72 billion, staying in the black for 68 consecutive months, though the surplus was a visible fall from $12.29 billion in the previous month.

“The accumulated current account surplus reached $66.9 billion as of October,” said an official of the BOK.

“Under the current circumstances, we expect that there will be problems in attaining the BOK’s annual target of $78 billion by the end of the year.”

Exports rose 7.1 percent on-year to $44.96 billion, while imports climbed 7.9 percent to $37.82 billion, data showed. 

By Bae Hyun-jung (tellme@heraldcorp.com)