Hidden Drivers Behind the Record-High Current Account Surplus Beyond Semiconductors...Key Variables for This Year [BOK Focus]

"It is now virtually certain that the 115 billion dollar annual forecast by the Bank of Korea will be exceeded"
Structural increase in dividend and interest income from residents' overseas investments
Investment income surplus expected to surpass 30

Last year’s record current account surplus is now virtually confirmed. Even before the December figures are released, only 3.3 billion dollars more is needed to rewrite the all-time record. The hidden driving force behind this performance is “money that makes money.” As individual investors in overseas stocks (known as “Seohak Ants”), corporations, and the National Pension Service have all expanded their overseas investments, the resulting structural increase in dividend and interest income is contributing to the widening of the current account surplus.

Record current account surplus, 3.3 billion dollars to go... “It will surpass the Bank of Korea’s 115 billion dollar forecast”

Confirmation that last year set an all-time record current account surplus is expected to come on February 6, when the Bank of Korea releases the preliminary balance of payments data for December 2025. The cumulative current account surplus for January to November last year already reached 101.82 billion dollars, meaning that a surplus of just over 3.3 billion dollars in December would exceed the previous annual record of 105.12 billion dollars set in 2015. The 115 billion dollar surplus projected by the Bank of Korea in its November economic outlook is also now virtually assured. To reach that projection, the surplus that must be achieved in December is 13.18 billion dollars.

The main driver of last year’s record current account surplus was robust semiconductor exports. The goods balance, which reflects income from buying and selling goods, accounts for the largest share of the current account. The goods surplus for January to November last year came to 107.02 billion dollars, already surpassing 100 billion dollars. The semiconductor rally led to a large surplus in the goods balance. On a customs-cleared basis, semiconductor exports last year set a new all-time high for the second year in a row. Boosted by rising demand for artificial intelligence (AI), semiconductor exports increased 22.2% from the previous year to 173.4 billion dollars, accounting for 24.4% of Korea’s total exports. As a result, total exports last year rose 3.8% year-on-year to 709.7 billion dollars, breaking the previous record set in 2024.

The hidden contributor has been the investment income balance. This is “invisible income,” calculated as dividend and interest income from Koreans’ overseas investments minus income earned in Korea by foreign investors, unlike the goods balance which is based on physical trade. As Korean residents’ overseas investments in equities and bonds have increased, the investment income balance has been structurally trending upward. Overseas securities investment by residents reached 129.4 billion dollars from January to November last year, a 79.2% surge from a year earlier. Over the same period, the investment income surplus expanded to 29.468 billion dollars. Including December, the annual figure is believed to have exceeded 30 billion dollars. The share of the investment income balance in the total current account surplus rose from 4.6% in 2025 to 28.9% in January to November last year.

Semiconductors are the biggest swing factor this year... Volatility in the goods balance and the investment income buffer will both be key

Semiconductors will again be the core variable this year. Analysts expect the structure in which strong semiconductor exports, driven by expanded AI-related investment, support a current account surplus to continue. However, lingering uncertainties such as renewed tariff risks mean that the performance of the goods balance could diverge depending on how these risk factors play out.

According to the Ministry of Trade, Industry and Energy, exports on a customs-cleared basis last month came to 65.85 billion dollars, marking the first time January exports have exceeded 60 billion dollars. Semiconductor exports among this totaled 20.5 billion dollars, up 103% from a year earlier. However, concerns are mounting as trade uncertainties resurface, including the 25% semiconductor tariff floated last month by U.S. President Donald Trump as he pressed for passage of the Strategic Investment in America Act. Despite a series of relay meetings between U.S. officials and Korean government counterparts, the lack of visible progress is heightening anxiety.

If the goods balance becomes more volatile due to a deterioration in global trade conditions, a key question will be how much the investment income balance, which has grown to around 30% of the current account, can act as a buffer. Factors such as adjustments in the National Pension Service’s share of overseas investment and the impact of a strong won exchange rate will influence the pace of further expansion in overseas securities investment this year. Even so, many expect little change in the broader trend of a structural increase in the investment income balance as cumulative overseas investment builds up. The Bank of Korea projects that this year’s current account surplus will once again exceed last year’s record level. The Bank’s forecast for this year is 130 billion dollars.