South Korea’s Current Account Surplus Narrows on Oil

South Korea’s current account surplus narrowed in November as high oil prices pushed up the import bill and threatened to slow growth.

High oil prices “are definitely threatening to become a drag on South Korea’s economy,” Finance Minister Kwon Okyu said this month. Rising fuel costs could also complicate monetary policy by fanning inflation already at the highest in more than three years.
`Rising oil prices are a big headache for next year,” said Lee Sang Jae, an economist at Hyundai Securities Co. in Seoul. “The central bank will have to closely watch inflation in coming months.”

Confidence among South Korean manufacturers slid for a third month in December on concern that higher energy prices will increase production and transport costs and curb sales. Crude oil rose above $99 a barrel for the first time in November.

South Korea purchases 97 percent of its energy needs from overseas, and is the world’s fifth-largest importer of oil.

Bloomberg