Bank of Korea Releases Preliminary Balance of Payments for March 2025
Semiconductor Exports Return to Growth, Goods Account Surplus Widens
End of Winter Vacation Travel Peak Narrows Travel Account Deficit
First Quarter Current Account Surplus Reaches $19.26 Billion, Up 16.9% Year-on-Year
In March, South Korea recorded a current account surplus of $9.14 billion. This marks the 23rd consecutive month of surplus. The goods account performed strongly, with semiconductor exports rebounding to growth after just one month, and the deficit in the services account?including the travel account?narrowed due to the end of the winter vacation overseas travel peak season. As a result, the surplus widened compared to both the previous month and the same month last year. For the first quarter of this year, the current account surplus reached $19.26 billion, up 16.9% from the same period last year.
According to the "Balance of Payments (Preliminary) for March 2025" released by the Bank of Korea on the 9th, South Korea's current account surplus in March was $9.14 billion. This is the 23rd consecutive month of surplus since May 2023. Compared to the previous month's $7.18 billion and $6.99 billion in the same month last year, the surplus widened in both cases.
The goods account, which constitutes a large portion of the current account, contributed to the surplus by slightly increasing its surplus compared to the previous month. In March, the goods account posted a surplus of $8.49 billion. This was an increase from both the previous month ($8.18 billion) and the same month last year ($8.39 billion).
Exports reached $59.31 billion, up 2.2% from the same month last year. Semiconductor exports returned to growth after just one month, and continued strong computer exports boosted the growth rate of IT items. Some non-IT items, such as automobiles and pharmaceuticals, also increased. In March, exports of information and communication devices based on customs clearance reached $3.47 billion, up 21.0%, and semiconductors also increased by 11.6% to $13.2 billion. Pharmaceuticals rose by 17.6%, passenger cars by 2.0%, and machinery and precision instruments by 1.4%. However, petroleum products fell by 28.2% to $3.36 billion.
Imports also rose by 2.3% to $50.82 billion. Although energy prices continued to fall, the increase in gas import volumes slowed the decline in raw material imports, while imports of capital and consumer goods increased, resulting in a larger overall increase. In March, raw material imports based on customs clearance fell by 7.5% to $23.85 billion. There were decreases across the board: coal (-34.6%), petroleum products (-15.1%), chemical products (-12.8%), and crude oil (-9.0%), while gas imports increased by 10.9%. Capital goods imports rose by 14.1% to $20.41 billion, mainly due to increases in semiconductor manufacturing equipment (85.1%) and semiconductors (10.6%). Imports of information and communication devices (-0.4%) and transportation equipment (-3.4%) decreased. Consumer goods imports also increased by 7.1% to $9.04 billion, with increases in passenger cars (8.8%), non-durable consumer goods (3.8%), and direct consumer goods (2.1%), while grain imports fell by 17.3%.
The services account, which includes the travel account, posted a deficit of $2.21 billion, narrowing from the previous month's $3.21 billion deficit. The travel account deficit was $720 million, a significant reduction from the previous month's $1.45 billion deficit. This was mainly due to the end of the winter vacation overseas travel peak season and the start of the spring peak season for foreign visitors to Korea. The intellectual property rights usage fee account posted a deficit of $630 million, slightly larger than the previous month's $580 million deficit.
The primary income account posted a surplus of $3.23 billion, mainly due to dividend income. The dividend income account recorded a surplus of $2.6 billion, as income from direct investment dividends increased, widening the surplus.
Net external assets in the financial account, calculated as assets minus liabilities, increased by $7.82 billion. In direct investment, overseas investment by domestic residents increased by $4.75 billion, and foreign investment in Korea rose by $760 million. In securities investment, overseas investment by domestic residents increased by $12.13 billion, mainly in stocks. Foreign investment in Korea increased by $4.5 billion, mainly in bonds. Derivatives increased by $2.04 billion. In other investments, assets decreased by $4.2 billion, mainly due to loans, and liabilities decreased by $940 million, mainly in other liabilities. Reserve assets decreased by $2.58 billion.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
