Semiconductor Boom Continues... Current Account Surplus for 11 Consecutive Months (Update)

Current Account Surplus of $6.93 Billion in March
Semiconductor Exports Drive Current Account Surplus

[Image source=Yonhap News]

The current account surplus reached $6.93 billion, driven by strong semiconductor performance. The current account has been positive for 11 consecutive months since May last year.

According to the Bank of Korea's provisional "March Balance of Payments" released on the 9th, the current account recorded a surplus of $6.93 billion in March.

The current account surplus has been recorded for 11 consecutive months since May last year ($2.3 billion), June ($6.177 billion), July ($4.113 billion), August ($5.412 billion), September ($6.072 billion), October ($7.437 billion), November ($3.89 billion), December ($7.414 billion), January this year ($3.045 billion), and February ($6.858 billion).

The surplus was led by semiconductors. In March, exports ($58.27 billion) increased mainly due to semiconductors and information and communication devices, despite decreases in petrochemicals and steel products. Based on customs clearance, semiconductors increased by 34.5% year-on-year, information and communication devices by 7.9%, and petroleum products by 3.3%. Meanwhile, passenger cars (-5.7%), machinery and precision instruments (-6.6%), steel products (-9.4%), and petrochemicals (-11.4%) decreased.

By region, exports increased year-on-year to Southeast Asia (12.7%), the United States (11.6%), and China (0.4%), but decreased to the European Union (EU, -6.7%) and Japan (-12%).

Imports amounted to $50.18 billion, down 13.1% year-on-year. This decline continued mainly due to lower energy prices affecting raw materials. Based on customs clearance, raw materials such as coal decreased by 18.4% year-on-year, capital goods including semiconductor manufacturing equipment and information and communication devices decreased by 3.5%, and consumer goods such as passenger cars and grains decreased by 9.5%.

The goods balance, representing the difference between exports and imports, recorded a surplus of $8.09 billion, continuing the surplus since April last year. The surplus widened compared to the previous month and turned positive year-on-year as well.

The services balance recorded a deficit of $2.43 billion, mainly due to travel and intellectual property royalties. Construction ($420 million) maintained a surplus, but travel (-$1.07 billion) and processing services (-$540 million) continued to run deficits.

The primary income balance showed a surplus of $1.83 billion, mainly from dividend income. Although wages and salaries decreased by $260 million, dividend income increased by $1.78 billion. The secondary income balance recorded a deficit of $560 million.

The net financial account, which is assets minus liabilities, showed a net increase of $11.06 billion, significantly expanding from $6.85 billion in the previous month. Direct investment increased by $2.83 billion, mainly from domestic investors' overseas investments, while foreign investors' domestic investments increased by $1.61 billion. Securities investment saw domestic investors' overseas stock investments increase by $8.88 billion, mainly in bonds. Foreign investors' domestic investments decreased by $840 million, mainly in bonds.