“The current account posted a hefty surplus of $6.7 billion as exports continued to perform strongly, growing by 8.0 percent during the first ten months of 2000. Machinery and transport equipment, electronics and garments, which remained the top three leading exports, continued to register moderate increases.
“Imports, on the other hand, rose by 4.8 percent due mainly to increased imports of mineral fuels and lubricants. This developed despite the contraction in the volume of oil imports as the unit price of petroleum crude in the world market rose by 83.5 percent to $27.30 per barrel. Likewise, imports of capital goods increased particularly telecommunication equipment and electrical machinery. By contrast, imports of raw materials & intermediate goods and consumer goods declined by 4.4 percent and 4.5 percent, respectively.
“Notwithstanding the sustained strong current account balance, the overall BOP position from January to October 2000 showed a deficit of $950 million. Behind this development was the deficit in the financial account of $4.3 billion resulting principally from net outflows of short-term trade credits and net loan repayments. These overshadowed the favorable performance of foreign direct investments and moderate net inflows in portfolio investments.
“The country’s net foreign direct investments for the first ten months of 2000 surged to $1.394 billion. Direct investment inflows were noted mainly in the telecommunication, electronics and automotive component industries as well as in oil exploration and chemical manufacturing activities.
Meanwhile, portfolio investments during the period in review managed to post a net inflow of $187 million. These consisted mainly of purchases by non-residents of government bonds issued abroad in March and in August.
“These developments brought the gross international reserves to $14.412 billion as of end-October 2000, equivalent to 4.3 months imports of goods, services and income.
Relative to the program level, the current account surplus of $6.7 billion was higher by $1.7 billion following the better-than-expected trade in goods surplus. Meanwhile, the capital and financial account recorded a higher deficit of $4.3 billion relative to the program primarily on account of substantial net outflows in the short-term capital account and lower medium- and long-term loan availments.