April Current Account Surplus at $5.7 Billion... Surplus Narrows on Seasonal Foreign Dividend Payments (Update)

24 Consecutive Months of Surplus, but Narrower Margin Due to Primary Income Deficit
Goods Account Surplus Reaches $8.99 Billion as Semiconductor Exports Rise and Imports Fall
Primary Income Account Posts $190 Million Deficit, but Smaller Than in Previous Aprils

In April, South Korea recorded a current account surplus of $5.7 billion. Although the country continued its streak of surpluses for 24 consecutive months, the surplus shrank significantly compared to the previous month’s $9.14 billion. This was mainly due to seasonal factors, as the primary income account posted a deficit because of concentrated dividend payments to foreign investors in April. Meanwhile, the goods account saw an increased surplus compared to the previous month, driven by robust performance in IT sectors such as semiconductors.

According to the "April 2025 Balance of Payments (Preliminary)" released by the Bank of Korea on June 10, South Korea’s current account surplus for April was $5.7 billion. This marks the 24th consecutive month of surplus since May 2023. While the surplus decreased from the previous month due to seasonal factors related to foreign dividend payments, it was larger than the surplus recorded in the same period last year ($1.49 billion).

The goods account, which makes up a significant portion of the current account, posted a slightly larger surplus compared to the previous month. In April, the goods account surplus was $8.99 billion. This was an increase from both the previous month ($8.49 billion) and the same month last year ($5.24 billion).

Exports reached $58.57 billion, up 1.9% from the same month last year. The continued strong performance of IT products, including a second consecutive month of growth in semiconductor exports, contributed to this increase. Non-IT exports such as pharmaceuticals and steel also rose. In April, IT product exports based on customs clearance increased by 10.8% year-on-year. Semiconductor exports grew by 16.9% to $11.81 billion, and wireless communication device exports increased by 6.3%. Non-IT exports also rose by 0.6%, driven by pharmaceuticals (22.3%) and steel products (8.1%). However, declines in passenger car exports (-4.1%) and petroleum products (-13.8%) partially offset these gains.

Imports totaled $49.58 billion, a 5.1% decrease from the same period last year. The decline was mainly due to a further reduction in raw material imports resulting from lower energy prices, as well as a decrease in consumer goods imports. In April, raw material imports based on customs clearance were $24.71 billion, down 10.4% year-on-year. Imports of coal (-38.5%), crude oil (-19.9%), gas (-11.4%), and chemical products (-5.4%) all declined. Petroleum product imports rose slightly by 0.7%. Consumer goods imports also fell by 2.1% to $9.15 billion, with decreases in grains (-11.5%), non-durable consumer goods (-3.3%), and passenger cars (-2.8%). Capital goods imports increased by 8.7% to $19.47 billion, led by semiconductor manufacturing equipment (26.8%), transportation equipment (20.8%), information and communication devices (9.8%), and semiconductors (1.1%).

The services account, which includes travel and transport, posted a deficit of $2.83 billion, widening from the previous month’s $2.21 billion deficit. The transport account recorded a $10 million deficit, turning negative for the first time in 15 months due to a lagged effect of falling container shipping rates following the Middle East ceasefire on January 15. The other business services account also saw its deficit widen to $1.51 billion from $1.1 billion the previous month, mainly due to a temporary increase in domestic companies’ payments for research and development (R&D) services. The travel account deficit narrowed to $500 million, compared to a $720 million deficit the previous month, due to the peak spring travel season for foreign visitors (March to May).

The primary income account posted a deficit of $190 million, mainly due to the dividend income account. In April, the dividend income account recorded a $650 million deficit, turning negative due to seasonal factors related to concentrated dividend payments to foreign investors. However, the deficit was significantly smaller than in previous Aprils. Compared to the same period last year (a $1.93 billion deficit), the deficit decreased sharply.

Net external assets, calculated as assets minus liabilities in the financial account, increased by $4.51 billion. Direct investment saw a $3.0 billion increase in overseas investments by domestic investors, while foreign investment in Korea decreased by $320 million. In portfolio investment, overseas investments by domestic investors rose by $12.33 billion, mainly in equities, while foreign investment in Korean equities decreased by $2.18 billion. Financial derivatives increased by $1.1 billion. Other investments saw assets rise by $2.84 billion, mainly in other assets, and liabilities increase by $7.45 billion, mainly due to borrowing. Reserve assets decreased by $9.81 billion.