May Current Account Surplus Hits $10.14 Billion, Driven by Semiconductor Exports (Update)

25 Consecutive Months of Surplus... Third-Largest May Surplus on Record
Goods Account Posts $10.66 Billion Surplus
Exports and Imports Both Decline, but Semiconductor Exports Remain Strong
Increase in Outbound Travelers Leads to Wider Travel Account Deficit

In May 2025, South Korea recorded a current account surplus of $10.14 billion. This marked the 25th consecutive month of surplus, and it was the third-largest May surplus on record. The expansion in the goods account surplus, driven by robust semiconductor exports, as well as the turnaround in the primary income account to surplus due to the disappearance of seasonal factors such as foreign dividend payments, contributed to this result.

According to the "Preliminary Balance of Payments for May 2025" released by the Bank of Korea on July 4, South Korea's current account surplus in May totaled $10.14 billion. The current account has remained in surplus for 25 consecutive months since May 2023. Compared to the previous month ($5.7 billion) and the same month last year ($9.09 billion), the surplus widened in both cases. This was the third-largest May surplus on record, following 2016 ($10.49 billion) and 2021 ($11.31 billion).

The goods account, which constitutes a large portion of the current account, posted a surplus of $10.66 billion. The surplus increased compared to the previous month ($8.99 billion) and the same month last year ($8.82 billion). Although both exports and imports decreased compared to the same period last year, the decline in imports was larger, resulting in a wider surplus.

Exports amounted to $56.93 billion, a 2.9% decrease from the same month last year. Non-IT items such as automobiles, steel, and petroleum products declined, resulting in the first decrease in four months. However, the continued growth in semiconductor exports partially offset the decline. In May, semiconductor exports based on customs clearance reached $13.93 billion, up 20.6%. In contrast, petroleum products fell by 20% to $3.64 billion. Steel products and passenger car exports also dropped by 9.6% and 5.6%, respectively.

Imports also decreased by 7.2% year-on-year to $46.27 billion. While capital goods maintained an upward trend, the decline in energy prices led to a larger overall decrease. In May, imports of raw materials based on customs clearance were $23.3 billion, down 13.7%. Coal (-31.6%), petroleum products (-30%), crude oil (-14%), and chemical products (-8.4%) all showed declines. Capital goods increased by 4.9% to $18.34 billion. Imports of semiconductor manufacturing equipment (26.1%), transportation equipment (46.8%), and information and communication devices (16.4%) rose, while semiconductor imports fell by 3.5%. Consumer goods also increased by 0.4% to $8.68 billion. Passenger car imports grew by 16.8%, while grain imports decreased by 16.4%.

The services account, which includes travel, recorded a deficit of $2.28 billion, narrowing from the previous month's deficit of $2.83 billion. The travel account posted a deficit of $950 million as the number of outbound travelers increased during the May holidays, resulting in a wider deficit. On the other hand, the intellectual property rights account posted a deficit of $340 million, but the deficit narrowed as domestic companies received royalties from overseas subsidiaries. The other business services account also recorded a deficit of $1.07 billion, with the deficit shrinking due to a base effect from a temporary increase in R&D service payments in the previous month.

The primary income account recorded a surplus of $2.15 billion, mainly due to the dividend income account. With the resolution of seasonal factors from the previous month, dividend payments decreased, resulting in a turnaround to surplus within a month.

Net external assets, calculated as assets minus liabilities in the financial account, increased by $6.71 billion. In direct investment, overseas investment by residents increased by $4.13 billion, while foreign investment in Korea rose by $320 million. In securities investment, overseas investment by residents increased by $10.09 billion, mainly in bonds, and foreign investment in Korea increased by $12.77 billion, also mainly in bonds. Derivatives decreased by $880 million. In other investments, assets increased by $8.01 billion, mainly in loans, while liabilities increased by $970 million, mainly in other liabilities. Reserve assets decreased by $570 million.