October Current Account Surplus of $11.66 Billion... Third Largest Surplus on Record (Update)

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] Thanks to the export growth centered on semiconductors and automobiles, the current account surplus in October recorded the third-largest amount in history. The Bank of Korea expects the current account surplus to exceed 60 billion dollars both this year and next year.

According to the 'October Balance of Payments (provisional)' statistics announced by the Bank of Korea on the 4th, the current account surplus recorded 11.66 billion dollars. It exceeded 10 billion dollars for two consecutive months. The surplus amount is the largest since September 2017 (12.34 billion dollars), ranking third in history.

The current account sums up all economic transactions between countries, including exports and imports of goods and services. The current account surplus trend has continued since last May, marking six consecutive months of surplus. The cumulative amount from January to October was 54.97 billion dollars.

Although exports in October amounted to 46.99 billion dollars, turning to a year-on-year decrease (-4.3%), the average daily export was 2.24 billion dollars, marking an increase for the first time in 23 months. Imports recorded 36.84 billion dollars, down 10.3% year-on-year due to the decline in energy prices.

The deficit in the services account (-660 million dollars) also significantly decreased. The improvement in the transportation account was largely due to increased income from maritime and air cargo transportation and reduced payments mainly in air passenger transportation. The reduction in the travel account deficit amid the COVID-19 pandemic also had an impact.

The primary income account surplus, related to wages, dividends, and interest flows, recorded 2.45 billion dollars, an increase of 620 million dollars compared to the same month last year. This was influenced by increased dividend and interest income from securities investments mainly by institutional investors, while dividend payments on direct investments decreased.