Semiconductor Exports Drive Goods Account Surplus to $8.99 Billion
Foreign Dividend Season Turns Primary Income Account to Deficit... Transport Account Weakens
Import Decline Due to Falling Oil Prices, 2025 Current Account Surplus Forecast Raised from $75 Billion to $82 Billion... "Tariff Impact to Intensify in Second Half"
In April, South Korea's current account surplus reached $5.7 billion. This marked the 24th consecutive month of surplus, but the surplus amount shrank significantly compared to the previous month ($9.14 billion). The decrease was mainly due to a seasonal factor: a deficit in the primary income account caused by concentrated dividend payments to foreign investors in April. Meanwhile, the goods account surplus widened from the previous month, as exports of IT items such as semiconductors continued to rise and imports decreased due to falling energy prices.
(From left) Kim Taeho, Manager of the International Balance of Payments Team at the Bank of Korea; Song Jaechang, Head of the Financial Statistics Department; Kim Sungjun, Director of the International Balance of Payments Team; and Kwon Suhan, Manager of the International Balance of Payments Team, are participating in the Q&A session at the "April 2025 International Balance of Payments (Preliminary) Press Briefing" held on the 10th at the Bank of Korea in Jung-gu, Seoul. Bank of Korea
Semiconductor Export Growth Expands, Imports Decrease... Goods Account Surplus Rises to $8.99 Billion
According to the "April 2025 International Balance of Payments (Preliminary)" released by the Bank of Korea on the 10th, South Korea's current account surplus in April was $5.7 billion. This marks 24 consecutive months of surplus since May 2023. Although the current account surplus decreased from the previous month due to seasonal factors related to foreign dividend payments, it was still a large surplus compared to previous Aprils. It also increased significantly compared to the same period last year ($1.49 billion). For the month of April alone, this is the third-largest surplus on record, following 2015 and 2014.
The goods account, which makes up a large portion of the current account, saw its surplus increase slightly from the previous month. In April, the goods account recorded a surplus of $8.99 billion, up from $8.49 billion in the previous month and $5.24 billion in the same month last year.
Exports totaled $58.57 billion, up 1.9% from a year earlier. The continued strong performance of IT items, including a second consecutive month of growth in semiconductor exports, as well as increased exports of non-IT items such as pharmaceuticals and steel, contributed to the rise. In April, exports of IT items based on customs clearance increased by 10.8% year-on-year. Semiconductor exports rose 16.9% to $11.81 billion, and exports of wireless communication devices increased by 6.3%. Non-IT items also grew by 0.6%, led by pharmaceuticals (22.3%) and steel products (8.1%). However, exports of passenger cars (-4.1%) and petroleum products (-13.8%) declined.
Imports amounted to $49.58 billion, down 5.1% from the same period last year. The decline was driven by a further decrease in raw material imports due to lower energy prices, as well as a drop in consumer goods imports. In April, imports of raw materials 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 decreased. However, imports of petroleum products edged up by 0.7%. Consumer goods imports also fell 2.1% to $9.15 billion, with declines in grains (-11.5%), non-durable consumer goods (-3.3%), and passenger cars (-2.8%). Imports of capital goods increased by 8.7% to $19.47 billion, mainly due to higher imports of semiconductor manufacturing equipment (26.8%), transportation equipment (20.8%), information and communication devices (9.8%), and semiconductors (1.1%).
However, experts say it is premature to characterize the current situation as a "recession-type surplus," where the surplus results from a larger drop in imports than in exports amid weak exports. Cumulatively from January to April this year, exports fell 0.4% year-on-year, while imports decreased by 2.1%. However, much of the import decline was due to lower energy prices. Excluding the impact of energy prices, imports have actually increased, mainly in capital goods. According to the Korea Customs Service and Korea National Oil Corporation, energy imports fell by 14.2% from January to April, but non-energy imports rose by 2.9%. Song Jaechang, Head of the Financial Statistics Department at the Bank of Korea, said, "Imports are solidly increasing, especially for capital goods such as semiconductor manufacturing equipment. While consumer goods are somewhat sluggish, if we exclude the impact of lower oil prices, it is not accurate to call this a recession-type surplus."
Foreign Dividend Season Turns Primary Income Account to Deficit... Transport Account Weakens
The primary income account posted a deficit of $190 million, mainly due to a deficit in the dividend income account. In April, the dividend income account recorded a deficit of $650 million, turning to deficit due to seasonal factors from concentrated dividend payments to foreign investors. However, the deficit was much smaller than in previous Aprils. Compared to the same period last year (-$1.93 billion), the deficit shrank significantly. This was partly offset by a steady increase in net external financial assets, which led to higher dividend income from abroad.
The services account, which includes travel and transport, posted a deficit of $2.83 billion, widening from the previous month (-$2.21 billion). The transport account (-$10 million) turned to deficit for the first time in 15 months, as the impact of falling container shipping rates since the Middle East ceasefire on January 15 began to be felt. The other business services account also posted a deficit of $1.51 billion, up from a deficit of $1.1 billion in the previous month, due to a temporary increase in payments by domestic companies for research and development services. The travel account deficit was limited to $500 million, narrowing from the previous month (-$720 million) thanks to the spring peak season for foreign visitors (March to May).
Net assets in the financial account, which is assets minus liabilities, increased by $4.51 billion. This was a smaller increase than the previous month ($7.82 billion). In direct investment, overseas investment by residents increased by $3 billion, mainly in key industries such as automobiles and secondary batteries, while foreign investment in Korea decreased by $320 million. In portfolio investment, overseas investment by residents, mainly in stocks, increased by $12.33 billion, while foreign investment in Korea, mainly in stocks, decreased by $2.18 billion due to weakened investment sentiment amid intensifying global trade tensions. Derivatives increased by $1.1 billion. Other investments saw assets increase by $2.84 billion, mainly in other assets, and liabilities increase by $7.45 billion, mainly in borrowings. Reserve assets decreased by $9.81 billion.
Import Decline Due to Falling Oil Prices, 2025 Current Account Surplus Forecast Raised from $75 Billion to $82 Billion... "Tariff Impact to Intensify in Second Half"
The current account surplus is expected to increase in May as seasonal effects disappear. Song Jaechang said, "The customs-based trade surplus in May increased compared to April, and as the seasonal impact on the primary income account fades, the current account surplus in May will be larger than in April."
Last month, the Bank of Korea raised its forecast for the 2025 current account surplus to $82 billion in its "May Economic Outlook," up from the $75 billion forecast in February. This result exceeded expectations that the May outlook would fall short of the February forecast. Song Jaechang explained, "The main reason is falling oil prices, which have slowed the pace of import growth more than initially expected. This effect is likely to continue into the second half of the year." He also noted that exports from January to April were stronger than forecast in February, supporting the current account balance. Song Jaechang said, "In the May outlook, we projected a surplus of $32.8 billion for the first half of the year, and as of April, the surplus stood at $24.96 billion. With the addition of the figures for May and June, it should be fully achievable."
However, he cautioned that the impact of U.S. tariffs, which will be fully implemented in the second half of the year, needs to be monitored. Song Jaechang said, "Tariffs by item have been applied to steel and aluminum in March, automobiles in April, and auto parts in May, with a basic tariff of 10% also imposed. Although reciprocal tariffs have been temporarily suspended, the tariff impact will likely expand further in the second half of the year, depending on factors such as the time lag from contract to export (for steel), sales price trends, and the degree of local production (for automobiles)."
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