The country’s current account surplus fell to a 7-month low in August as exports fell on slowing demand from advanced nations, the central bank said Thursday.

The current account surplus, the broadest measure of trade encompassing goods, services and investments, came in at $401.3 million in August, down from a revised $3.77 billion in July, the Bank of Korea said. The figure is the smallest net gain since a $154.7 million surplus in January. Exports grew 25.9 percent to $45.94 billion in August from a year ago, compared with revised growth of 21.7 percent to $49.18 billion in July. Imports expanded 28.9 percent in August from a year ago, compared with 25 percent on-year growth in July. Exports account for more than half of the Korean economy.

BOK remained optimistic of export growth for the coming months and predicted the current account to remain in the black in September for the 19th month.

“Exports of products excluding semiconductors and flat panels are expected to remain robust for September,” said Yang Jae-ryong, director of the BOK’s monetary and financial statistics division.

Gov. Kim Choong-soo had earlier told lawmakers this week that exports will remain robust despite the ongoing European debt crisis.

“Given that the current account surplus usually picks up in the fourth quarter compared with the third quarter, the country may easily achieve the full-year surplus target,” Yang added.

Lee Sang-jae, a senior economist at Hyundai Securities Co., said the dangers are with the capital market.

“Although IT product demands would shrink in short-term due to economic downturns in the U.S. and Europe, exports should grow steadily. But capital could flow out from the local market fast and cause a credit crunch,” Lee said.

The country’s capital and financial account posted a net outflow of $2.37 billion in August, similar to a net outflow of $2.48 billion in July, BOK said. Mutual fund accounts investing in local stocks and bonds posted a net outflow of $.9.26 billion and $2.92 billion in July and August each.

By Cynthia J. Kim (cynthiak@heraldcorp.com)