In March, South Korea recorded a historic current account surplus exceeding 54 trillion won, driven by strong semiconductor exports. Despite ongoing conflicts in the Middle East, the surplus trend is expected to continue.
According to preliminary statistics released by the Bank of Korea on May 8, the current account surplus for March was $37.33 billion (approximately 54.4 trillion won), marking the second-longest streak of surpluses since 2000 at 35 consecutive months. This figure significantly surpassed the previous record of $23.19 billion set in February.
From January to March, the cumulative current account surplus reached $73.78 billion, a 3.8-fold increase compared to $19.49 billion during the same period last year, achieving more than half of the annual surplus of $123.05 billion from last year within just three months.
By category, the goods balance recorded a surplus of $35.07 billion, the highest ever, and up 3.6 times from $9.69 billion in the same month last year.
Exports totaled $94.32 billion, a 56.9% increase year-on-year, driven by strong performance in information technology products, particularly semiconductors and computer peripherals. Non-IT items also saw growth due to increased working days and rising oil prices.
Customs data showed significant increases in exports of computer peripherals (167.5%), semiconductors (149.8%), petroleum products (69.2%), wireless communication devices (13.1%), and chemical products (9.1%).
Imports rose by 17.4% to $59.24 billion, with capital goods imports increasing by 23.6%, particularly in information and communication equipment (51.6%), transportation equipment (34.8%), and semiconductors (34.5%). Raw material imports also increased by 8.5%, marking a turnaround after six months, driven mainly by chemical products (20.5%). Consumer goods imports rose by 2.1%.
The services balance recorded a deficit of $1.29 billion, significantly reduced from a deficit of $2.51 billion in the same month last year and $1.86 billion the previous month. Notably, the travel balance turned positive with a surplus of $140 million, the first surplus since November 2014, attributed to the spring travel season and an influx of foreign tourists. March saw over 2 million arrivals for the first time, boosted by BTS concerts and increased K-pop tourism.
In the financial account, foreign investment in the domestic stock market showed a notable decline. Direct investments increased, with domestic investments abroad rising by $8.89 billion and foreign investments in Korea increasing by $3.77 billion. However, securities investments saw a $40 billion increase in domestic investments abroad, while foreign investments in domestic stocks dropped by $34.04 billion, the largest decline on record, influenced by risks in the Middle East and profit-taking.
Despite the ongoing conflict in the Middle East, the surplus trend is expected to persist. Kim, a director at the Bank of Korea, noted that while the U.S.-Iran conflict and the blockade of the Strait of Hormuz had some impact on trade in April, it was not significant enough to disrupt the overall trend. He expressed optimism that the current account would continue to show positive results beyond April, although he emphasized the need to monitor semiconductor export trends and the developments in the Middle East.
However, he cautioned that the surplus in April might decrease due to rising energy prices affecting raw material imports. The cost of crude oil rose sharply from $75.4 per barrel in March to $112.3 in April.
The semiconductor sector is expected to remain resilient despite the Middle East conflict, with increased capital investment and rising imports of capital goods. Kim stated that reports of semiconductor supply shortages have led to increased investments, indicating that the sector is unlikely to be significantly impacted by the ongoing situation.
* This article has been translated by AI.
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