'Thanks to Semiconductor Exports'... Current Account Surplus for 4 Consecutive Months (Update)

August International Balance of Payments (Preliminary)
Current Account Surplus of 6.6 Billion USD
Semiconductor and IT Exports Drive Surplus

With strong export growth centered on IT items such as semiconductors, South Korea's current account balance recorded a surplus for four consecutive months.

An HMM container ship is docked at Busan Port. Photo by Jinhyung Kang aymsdream@

According to the "August Balance of Payments (provisional)" released by the Bank of Korea on the 8th, South Korea's current account surplus in August was $6.6 billion. The current account has shown a surplus for four consecutive months since May.

The surplus amount decreased compared to $8.97 billion last month. However, the surplus expanded compared to August of last year. The current account surplus in August last year was $5.41 billion.

By category, exports increased by 7.1% year-on-year to $57.45 billion, and imports rose by 4.9% to $50.86 billion. Accordingly, the goods balance recorded a surplus of $6.59 billion, with the surplus narrowing compared to the previous month.

The continued strong export performance was thanks to IT items such as semiconductors. Based on customs clearance in August, exports of information and communication devices increased by 44% year-on-year, semiconductors by 38.3%, and petroleum products by 0.6%. On the other hand, most non-IT items decreased. Exports of steel products (-0.2%), machinery and precision instruments (-1.6%), passenger cars (-3.6%), and chemical products (-4.4%) all declined.

By region, exports to the EU increased by 16.1%, Southeast Asia by 15.3%, the United States by 11.1%, China by 7.9%, and Japan by 6.6%.

The services balance recorded a deficit of $1.23 billion, centered on travel and processing services. This was due to the expansion of the travel balance deficit influenced by the peak season for overseas travel in summer. The transport balance surplus increased compared to the previous month due to rising container ship freight rates.

The primary income balance showed a surplus of $1.69 billion, mainly from dividend income. The secondary income balance recorded a deficit of $460 million.

The financial account net assets, which show capital inflows and outflows, increased by $4.93 billion in August. The increase was smaller compared to the previous month ($11.03 billion). Direct investment saw an increase of $4.46 billion in outbound investment by domestic investors and $1.21 billion in inbound investment by foreigners.

In securities investment, domestic investors' overseas investment increased by $8.64 billion, mainly in stocks. Foreign investors' domestic investment increased by $2.62 billion, mainly in bonds.