January Current Account Surplus of 2.94 Billion Won... Export Turns to Decline (Update)

Bank of Korea Reports January Balance of Payments (Provisional)
Surplus Shrinks to One-Quarter in a Month Due to Seasonal Factors and Fewer Working Days
Exports Turn to Decline as Semiconductor Growth Slows

In January of this year, the current account recorded a surplus of $2.94 billion, continuing a surplus trend for 21 consecutive months. However, the growth in semiconductors, which had driven the surplus, slowed down, and the number of working days decreased due to the Lunar New Year holiday, resulting in a decline compared to the previous year.

According to the "January Balance of Payments (provisional)" released by the Bank of Korea on the 7th, the domestic current account recorded a surplus of $2.94 billion in January.

The current account surplus has continued for 21 consecutive months since May 2023 ($2.0925 billion). Compared to the surprising performance of December last year, which recorded $12.37 billion, it decreased to about one-quarter in one month. Even considering seasonal factors, it decreased by $110 million compared to January last year ($3.05 billion).

By detailed item, the goods balance recorded a surplus of $2.5 billion. Compared to January last year ($4.36 billion), it decreased by $1.86 billion. This is due to exports falling by 9.1% year-on-year to $49.81 billion and imports decreasing by 6.2% to $47.31 billion.

In exports, the growth in semiconductors based on customs clearance slowed, while the decline in petroleum products, passenger cars, machinery, and precision instruments expanded. By region, exports decreased in China (-14%), the European Union (EU, -11.6%), and the United States (-9.4%).

Imports continued to decline in raw materials, while the growth in capital goods slowed and consumer goods turned to a decrease.

The services balance recorded a deficit of $2.06 billion, centered on travel and processing services. The primary income balance showed a surplus of $2.62 billion, mainly from dividend income. The secondary income balance recorded a deficit of $120 million.

The net financial account, which is assets minus liabilities, increased by $3.72 billion. In direct investment, domestic investors' overseas investment decreased by $940 million, while foreign investors' domestic investment increased by $1.23 billion.

In securities investment, domestic investors' overseas investment increased by $12.55 billion, mainly in stocks, whereas foreign investors' domestic investment decreased by $290 million, also mainly in stocks.