Korea’s current account surplus reached US$35.5 billion in 2023. This was mainly because the volume of goods exports reaching a yearly high at the end of 2023.
The current account surplus stood at US$7.41 billion in December, according to a December 2023 provisional balance of payments data released by the Bank of Korea (BOK) on Feb. 7. This marked the eighth consecutive month of surplus since May 2023. On an annualized basis, the current account surplus came in at US$35.49 billion, up US$9.66 billion from US$25.83 billion the previous year. The figure dwarfs the BOK’s initial forecast of US$30 billion.
“Since the BOK released its forecast in November 2023, the statistical flow showed an improvement in the current account surplus led by semiconductor exports as demand for high-performance semiconductors increased in November and December and chip prices recovered,” said Shin Seung-cheol, head of the BOK’s Economic Statistics Division.
Korea’s goods balance was a surplus of US$8.04 billion. Within the goods balance, exports totaled US$59.0 billion, up 5.8 percent year on year. This was the third consecutive month of growth, driven by the strong growth of semiconductor exports and continued strong demand for passenger cars. The figure eclipsed the previous yearly high of US$57.8 billion in October 2023. By export item, semiconductors increased by 19.1 percent, passenger vehicles by 19.2 percent, and ships by 44.4 percent. By region, exports to the United States inflated by 20.7 percent, those to Southeast Asia by 15.4 percent, and those to Japan by 2.5 percent. Those to China, on the other hand, posted a 3.0 percent decline.
On an annualized basis, Korea’s exports fell by 7.1 percent year on year to US$645.05 billion and imports fell 10 percent to US$610.96 billion in 2023. On an annualized basis, the decline in Korea’s imports was larger than the decline in Korea’s exports, creating a recessionary surplus.
Korea’s services balance posted a US$2.54 billion deficit led by travel, processing services, and other business services. On an annualized basis, the services balance was US$25.66 billion in deficit. This was the largest deficit since 2019 (US$26.8 billion). Within the services balance, travel posted a deficit of US$1.34 billion in December.
Korea’s primary income balance was US$2.46 billion in surplus due to a turnaround in dividend income. The dividend income balance turned positive by US$2.25 billion as dividend income from overseas subsidiaries of Korean companies climbed and the effects of the previous month’s quarterly dividend payment disappeared.
Korea’s financial account showed an increase of US$5.68 billion in net assets. Net assets of direct investments increased by US$4.42 billion, mainly in the secondary battery industry. Net assets of investment in securities jumped by US$210 million. Koreans’ overseas investment rose by US$3.04 billion, mainly in equities, and foreign investment in Korea grew by US$2.83 billion, mainly in equities.
Other investments dipped by US$6.02 billion in assets, mainly cash and deposits, and by US$4.41 billion in liabilities, mainly borrowings.