Korea Enjoys Current Account Surplus for 7th month in Row

Korea’s current account has been in surplus for seven consecutive months as its exports recovered.

Korea’s current account surplus stood at US$4.06 billion in November last year, according to provisional balance of payments statistics released by the Bank of Korea on Jan. 9. It had been in surplus for seven consecutive months since May 2023. It was the first time in 16 months since the January-July period of 2022 that the current account was in surplus for seven consecutive months.

By item, the goods balance posted a surplus of US$7.01 billion in November. The surplus eclipsed US$5.35 billion in October as exports continued to grow and imports declined.

Exports hit US$56.45 billion, up 7.0% year over year, logging the second consecutive month of growth in November. Among items, passenger vehicles (22.9%), semiconductors (10.8%), and chemical industrial products (2.6%) posted strong exports. By region, Korea enjoyed stellar exports to the United States (24.7%), Southeast Asia (11.7%), and Japan (11.4%). Semiconductor exports turned positive for the first time in 16 months since 2.5% in July 2022.

By contrast, imports fell 8.0% to US$49.45 billion with raw material imports down 13.2% from the same month a year ago, driven in particular by lower energy import prices. Among commodities, gas, coal, and crude oil imports declined by 45.1%, 40.1%, and 2.7%, respectively. Imports of capital goods fell by 11.7%, while imports of consumer goods shrank by 6.2%.

Korea’s services balance posted a deficit of US$2.13 billion. The deficit climbed from a deficit of US$1.25 billion in October. In detail, a deficit in the travel balance reached US$1.28 billion higher than a deficit of US$640 million in October as the number of tourists from Southeast Asia and China decreased while the number of Korean tourists to Japan inflated. The balance of intellectual property rights returned to a surplus of US$240 million in November as Korean companies received more royalty income from their overseas subsidiaries.

However, Korea’s primary income account which posted a surplus of US$2.77 billion in October, reached a deficit of US$150 million in November. While dividend income declined, Korean companies’ overseas quarterly dividend payments rose sharply, pushing the dividend income balance to US$801 million.

Korea’s cumulative current account surplus in the January-November period of 2023 was US$27.43 billion, about US$300 million more than US$27.15 billion in the same period of 2022. As of the end of November, Korea was within striking distance of reaching the Bank of Korea’s full-year forecast of US$30 billion.