September Current Account Surplus Hits Second-Highest Ever... "Record Annual Surplus Likely If Semiconductor Boom Continues in November and December" (Comprehensive)

Current Account Surplus Reaches $13.47 Billion... 29 Consecutive Months in the Black
Record-High Semiconductor Exports, Passenger Car Exports Also Up
October Customs Exports See Only Slight Decline Despite Fewer Business Days Due to Holiday
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In September, South Korea's current account surplus reached $13.47 billion, marking the second-largest surplus on record and the highest ever for the month of September. The goods account also posted the second-highest surplus in history. This was driven by record-high semiconductor exports and a base effect from last year's Chuseok holiday in September, which boosted exports of passenger cars and ships.

The likelihood of this year's current account surplus surpassing the August forecast of a record $110 billion has increased. This is due to the resolution of uncertainties following the conclusion and postponement of Korea-US and Korea-China tariff negotiations, as well as a stronger-than-expected semiconductor "supercycle." If there are no major variables in the remaining fourth quarter, achieving the largest annual current account surplus in history appears possible. The impact of US tariffs is expected to gradually expand next year, as companies that delayed passing costs onto consumers this year are likely to do so gradually from next year onward.

Record-High Semiconductor Exports + Base Effect from Last September's Chuseok Holiday for Passenger Cars... Second-Highest Goods Account Surplus

According to the "September 2025 Balance of Payments (Preliminary)" released by the Bank of Korea on the 6th, South Korea's current account surplus in September was $13.47 billion. This was the second-largest surplus on record after June ($14.27 billion), and the highest ever for September. The country has posted a surplus for 29 consecutive months since May 2023, marking the second-longest streak since the 2000s. The surplus increased compared to both the same period last year ($11.29 billion) and the previous month ($9.15 billion).

The goods account, which makes up the largest portion of the current account, recorded a surplus of $14.24 billion, the second-highest ever after September 2017 ($14.52 billion). The surplus also increased compared to the same month last year ($10.67 billion) and the previous month ($9.4 billion), as exports grew more than imports.

Exports totaled $67.27 billion, up 9.6% from the same period last year, marking a return to growth after two months. The continued increase in exports of IT products such as semiconductors, which set a new record, contributed to this growth, along with a base effect from last year's Chuseok holiday that boosted exports of non-IT items such as passenger cars. In September, semiconductor exports based on customs clearance reached $16.79 billion, a sharp 22.1% increase year-on-year. Wireless communication devices also rose by 5.3%, resulting in a 13.9% increase in IT product exports. Non-IT exports grew by 11.8%, with passenger cars up 14.0% to $6.04 billion, and increases seen in chemical products (10.4%), machinery and precision instruments (10.3%), and steel products (2.5%).

Export vehicles are parked at Pyeongtaek Port in Gyeonggi Province. Photo by Yonhap News Agency

Imports amounted to $53.02 billion, up 4.5% from the same month last year. Despite the decline in international oil prices, the recovery in domestic consumption and an increase in business days led to a larger increase in imports of capital and consumer goods, as well as a rise in raw materials, resulting in a return to growth after three months. In September, raw material imports based on customs clearance were $24.49 billion, up 0.4% year-on-year. While imports of chemical products (10.2%) and gas (2.4%) increased, imports of coal (-6.8%), petroleum products (-9.8%), and crude oil (-13.3%) decreased, resulting in only a slight overall increase. Capital goods imports rose 12.2% to $21.84 billion, driven by information and communication devices (29.9%), transportation equipment (24.4%), and semiconductor manufacturing equipment (11.6%). Semiconductor imports fell slightly by 0.7%. Consumer goods imports surged 22.1% to $10.07 billion, with passenger cars (36.3%) showing strong growth, along with increases in direct consumption goods (21.4%), grains (8.4%), and non-durable consumer goods (3.1%).

Shin Seungcheol, Director General of Economic Statistics Department 1 at the Bank of Korea, stated, "The boom from the semiconductor supercycle is the biggest factor behind the expansion of this year's current account surplus. Although automobile exports to the US have declined, exports to Europe and other regions have performed well, and ship exports remain strong. Non-IT items are also showing a favorable trend due to export diversification." He also analyzed that the decrease in imports due to falling oil prices contributed to the expansion of the current account surplus.

Widening Service Account Deficit... Second-Highest September Primary Income Surplus

The service account posted a deficit of $3.32 billion, widening from the previous month's $2.12 billion deficit. The transportation account turned to a deficit of $120 million after five months, leading to a larger service account deficit. The intellectual property rights account also recorded a deficit of $850 million, as the seasonal concentration of royalty income in the previous month subsided, widening the deficit.

The travel account deficit ($910 million) narrowed slightly compared to the same period last year ($950 million) and the previous month ($1.07 billion).

The primary income account recorded a surplus of $2.96 billion, mainly due to dividend income. This was the second-highest September surplus on record, following last year's $3.1 billion. The dividend income account posted a surplus of $2.36 billion, with the surplus widening as the seasonal quarterly dividend payments from the previous month ended.

Net external assets in the financial account, calculated as assets minus liabilities, increased by $12.9 billion, up from $7.88 billion in the previous month. In direct investment, overseas investment by residents increased by $5.66 billion, and foreign investment in Korea rose by $1.8 billion. In securities investment, overseas investment by residents increased by $11.19 billion, mainly in stocks, while foreign investment in Korea increased by $9.08 billion, with balanced growth in both stocks and bonds. Derivatives decreased by $800 million. Other investments saw assets increase by $11.11 billion, mainly in other assets, and liabilities increase by $7.36 billion, mainly in borrowings. Reserve assets increased by $3.99 billion.

October Chuseok Holiday Causes Slight Decrease, but "Record-High Current Account Surplus Expected If No Major Variables"

In October, the current account surplus is expected to decrease slightly. However, if the strong semiconductor export trend continues as expected in November and December, the largest current account surplus on record is likely to be achieved this year. The Bank of Korea previously projected in its "Economic Assessment" released alongside the base rate decision on October 23 that the current account surplus for this year and next year would exceed the August forecast ($110 billion for this year and $85 billion for next year). This was based on the view that the semiconductor market could outperform expectations.

Director Shin stated, "The trade account surplus based on customs clearance in October was $6.06 billion, down from the previous month, but this was a temporary effect due to fewer business days caused by the long Chuseok holiday in early October. If strong semiconductor exports, stable oil prices, and a sustained primary income surplus continue as expected in November and December, the favorable trend will be restored." He cited the stronger-than-expected semiconductor market as the main factor behind the upward revision in the outlook. Director Shin explained, "The November revised economic outlook will reflect not only the better-than-expected semiconductor performance but also the easing of related uncertainties following the conclusion of Korea-US tariff negotiations and the postponement of US-China tariff negotiations."

The planned $350 billion investment in the US was also cited as a variable that could affect the future current account trend. Director Shin noted, "We need to monitor specifically which funds will be transferred and which areas will receive investment," but added, "In principle, commercial investments within the annual limit of $20 billion can contribute to the goods account through exports of raw and intermediate materials, and once projects enter the operational phase and generate operating profits, they can help increase the current account surplus by improving the primary income account (investment income account). However, concerns remain about the hollowing out of the manufacturing sector, reduced domestic investment capacity, and the possibility of Korean companies relocating overseas. Therefore, the government and businesses should consult to ensure that these investments benefit the Korean economy."