As the possibility of a current account deficit was raised early in April due to the payment of foreign dividends, the trade account deficit is also expected to widen.

According to the Bank of Korea and the financial investment industry, the main income account of the current account balance is expected to show a similar level of deficit in April of this year after showing a deficit of $ 4.18 billion in April last year.

The main income balance is calculated as the difference between the amount of payments and incomes resulting from the exchange of salaries, dividends, and interest between residents and non-residents, and usually turns to a deficit in April, when domestic companies show a surplus and concentrate on year-end closing dividend payments. 띱

According to the Korea Exchange, 528 out of 761 listed KOSPI listed companies in December allocated a total of 20,693 trillion won in 2019 earnings.

This is 2.88% less than the dividend amount (21.33 trillion won) based on 2018 earnings.

Although KOSPI's net profit declined 38% year-on-year, dividend payments did not change significantly as companies maintained a stable dividend policy.

In April of last year, $ 6.7 billion in foreign dividends was paid, but this year's payments are not expected to change much.

The problem is that in April, as the main income balance deteriorated, the overall account deficit is expected to increase due to a deficit in the product balance.

In addition to the main income balance, the current account balance consists of a product balance, a service balance, and a transfer income balance arising from the import and export of goods and services.

The commodity balance, which is the main component of the current account balance, is somewhat different from the trade balance, which is aggregated on a customs basis, at the time of inclusion or accounting, but is similar in that it represents the difference between commodity import and export.

The Ministry of Trade, Industry and Energy said today (one day) that the trade balance in April ended a surplus in 99 months, ending a deficit of $ 950 million.

The impact of global demand contraction following the proliferation of major countries in Corona 19 has been in full swing.

On the other hand, it was analyzed that the domestic market situation was better than other countries due to successful prevention, and imports decreased less than exports, affecting the deterioration of the trade balance.

The fact that the impact of the drop in international oil prices is reflected in time lag also affected the limited decline in imports.

As a result, in April of this year, the deterioration of the main income balance and the sharp decline in exports overlapped, and the likelihood of the overall current account deficit widening increased.

However, the 1st Deputy Minister of Strategy and Finance Kim Yong-beom said at the Innovation Growth Strategic Review and Policy Review Meeting today, "The trade deficit is not necessarily negative as a result of some paradoxical effects."

In the aftermath of Corona 19, the export deficit is inevitable for the time being, and the trade deficit is likely to continue in May.

While export deterioration is expected to continue for the time being, factors that limit import decline are likely to continue.

Hong Joon-pyo, a research fellow at the Hyundai Economic Research Institute, said, “Exports are expected to deteriorate in 2Q due to restrictions on the movement of major countries, while shrinking domestic consumption is a factor that causes imports to decrease relatively.” "We cannot rule out the possibility of a trade deficit."

However, despite the worsening exports, the current account is expected to improve after a temporary deficit in April.

Researcher Samsung Futures, Jeon Seung-ji, said, “From May, the foreign exchange supply and demand in the current business sector is expected to show a superior supply (foreign currency) supply. Because of the suspension, the travel deficit is expected to improve. "

He continued, “The income from overseas investment assets is steadily flowing in, while the payment of foreign dividends has been completed.”