South Korea Posts Record $9.13 Billion Current Account Surplus in July
Seoul, South Korea – South Korea’s current account surplus reacheda record $9.13 billion in July, marking the third consecutive month of surplus, according to preliminary data released by the Bank of Korea (BOK) on September 6th. While the surplus was $3.4 billion lower than June, it was the highest for the month since 2015, when it reached $9.37 billion.
The cumulative current account surplus from January to July amounted to $47.17 billion, a significant increase of $419.1 billion compared to the same periodlast year.
The strong performance was driven by a robust trade surplus, with goods exports exceeding imports by $8.49 billion in July. This marked the 16th consecutive month of a goods trade surplus, starting from April2023.
Exports grew by 16.7% year-on-year, reaching $586.3 billion. Key contributors to the export growth included semiconductors (50.1%), information and communication equipment (29.8%), petroleum products (16.8%), machineryand precision instruments (14.3%). However, passenger car exports declined by 8.9%.
Exports to Southeast Asia (27.4%), China (14.9%), Japan (10%), and the United States (9.3%) all showed positive growth.
Imports increased by 9.4% year-on-year, reaching $501.4 billion. Raw material imports, including petroleum products (37.9%), natural gas (23.5%), and crude oil (16.1%), rose by 9.5%. Capital goods imports, such as transportation equipment (121.1%), semiconductors (16.3%), and precision instruments (15.2%), increased by 11.9%. Consumer goods imports, including passenger cars (58.3%) and home appliances (15.5%), rose by 10.7%.
Despite the strongtrade performance, the services trade recorded a deficit of $2.38 billion, with tourism accounting for a deficit of $1.26 billion. The BOK attributed the increased tourism deficit to a rise in the number of South Koreans traveling abroad.
The primary income account, which reflects income from wages, dividends, and interest, recorded a surplus of $3.15 billion. Foreign direct investment in South Korea increased by $29.9 billion, while South Korean direct investment abroad rose by $43.3 billion. Foreign portfolio investment in South Korea increased by $39.2 billion, while South Korean portfolioinvestment abroad rose by $101.1 billion.
The strong current account surplus reflects the resilience of the South Korean economy, despite global economic uncertainties. The continued growth in exports, particularly in key sectors like semiconductors and information technology, has been a major driver of the surplus. However, the rising tourism deficit andthe increasing reliance on exports highlight the need for the South Korean government to diversify its economy and promote domestic consumption.
The BOK expects the current account surplus to remain at a healthy level in the coming months, supported by continued strong export performance and a gradual recovery in domestic demand. However, the bank also acknowledges that theglobal economic outlook remains uncertain, and that geopolitical risks could impact the Korean economy.
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