Services Account Deficit Hits Record High

The services account posted a record deficit last year, mainly due to a slump in inbound tourism.

The Bank of Korea on Monday said the services account deficit widened to US$34.47 billion in 2017 from $17.74 billion in 2016 and $14.92 billion in 2015, continuing a record-breaking trend for the third consecutive year.

The record stemmed from the worsening travel account, whose deficit also rose to a record of $17.17 billion, surpassing the previous high of $15.84 billion in 2007. Outbound travel increased nearly 20 percent on-year, while the number of Chinese tourists to Korea almost halved due to China’s unofficial boycott of Korean products.

The goods account posted a surplus of $119.89 billion, the second-largest figure after 2015. This was attributed mainly to a rise in the country's exports to $577.38 billion in 2017, ending three years of decline on the back of the improving global economy.