Concerns Linger over Exports
South Korea’s current account surplus hit an eight-month high in May this year based on a huge goods account surplus that benefitted from a global semiconductor boom. The current account surplus target for the first half, US$28 billion, is expected to be met with ease if the current pace continues.
According to the Bank of Korea, the current account surplus totaled US$8.68 billion in May, extending South Korea's surplus streak to the 75th consecutive month. The surplus jumped a lot from the previous month’s US$1.77 billion attributable to a large increase in dividend payment.
In May, the goods account surplus added up to US$11.39 billion, the largest since November last year. Likewise, commodity exports totaled US$53.78 billion to reach the highest level since September 2017. Commodity imports added up to US$42.39 billion. South Korea’s current account surplus for the first five months of this year is US$22.27 billion.
Although the central bank’s target for the first half is expected to be met, the export side is posing some concerns. According to the Ministry of Trade, Industry & Energy, South Korea’s monthly exports are estimated to have totaled US$51.23 billion last month, down 0.089% from a year earlier. Its service account deficit that has continued since the THAAD conflict between China and itself did not disappear in May.