Current Account Surplus for 18 Consecutive Months... Largest Cumulative Surplus in 5 Years

Bank of Korea to Announce 'October Balance of Payments (Preliminary)' on 7th
Largest Surplus in 5 Years for January-October Cumulative Period

[Asia Economy Reporter Jang Sehee] The current account balance continued its 18-month streak of surpluses in October, driven by the largest-ever surplus in the transportation account.

According to the "October 2021 Balance of Payments (Provisional)" released by the Bank of Korea on the 7th, the current account recorded a surplus of $6.95 billion in October. This marks 18 consecutive months of surplus since May last year. The surplus amount decreased by $4.61 billion compared to October last year ($11.55 billion).

The current account is a statistic that sums all economic transactions including exports and imports of goods and services, as well as capital and labor between countries.

The cumulative current account surplus from January to October this year was $77.07 billion, an increase of $22.48 billion compared to the same period last year.

This ranks third historically, following the record highs in 2015 ($87.35 billion) and 2016 ($82.69 billion).

By category, the goods account surplus ($5.64 billion) decreased by $4.53 billion compared to a year ago. Although exports increased by 20.1% year-on-year, imports rose by 38.2%, reducing the surplus margin.

The services account turned from a deficit of $830 million to a surplus of $630 million year-on-year in October, thanks to improvements in the transportation account.

This was due to a sharp increase in the transportation account surplus. The transportation account surplus, which was only $480 million a year ago, jumped to $2.22 billion last October, marking the largest surplus ever recorded.

The monthly Shanghai Containerized Freight Index (SCFI) and the air cargo freight index (TAC, Hong Kong-US) surged by 212.6% and 64.7% respectively compared to the same month last year, boosting transportation income ($4.77 billion) to an all-time high.

Looking at the financial account, which shows capital inflows and outflows, net assets (assets minus liabilities) increased by $7.01 billion in October. In direct investment, domestic investors' overseas investments increased by $7.72 billion, while foreign investors' domestic investments also rose by $3 billion. In securities investment, domestic investors' overseas investments increased by $940 million, and foreign investors' domestic securities investments grew by $3.92 billion.