SEOUL, July 08 (AJP) - South Korea posted a record current account surplus in May, driven by a chip-led export surge that pushed the goods surplus to an all-time high while underscoring the economy's growing reliance on a narrow group of technology products.
The current account surplus came to $38.61 billion in May, the Bank of Korea said Wednesday, surpassing the previous record set in March and rising sharply from $28.29 billion in April and $9.91 billion a year earlier.
The goods account, the main driver of the overall surplus, also logged a record surplus of $37.86 billion. Goods exports rose 62.9 percent from a year earlier to $94.34 billion, while imports increased 22.2 percent to $56.48 billion. Exports under the balance-of-payments framework reached a fresh high, slightly topping the previous peak in March. Imports were not at a record high and edged down from $56.70 billion in April, widening the goods surplus sharply.
The services account remained in deficit, but the shortfall narrowed to $1.09 billion from $2.42 billion a month earlier. The travel account swung to a small surplus of $50 million, while deficits continued in other business services and manufacturing services. The primary income account recorded a surplus of $2.17 billion, led by dividend income, while the secondary income account posted a deficit of $330 million.
For the first five months of the year, the current account surplus reached $141.28 billion. The goods surplus over the same period stood at $145.96 billion.
Customs-cleared trade data included in the Bank of Korea (BOK) release showed how heavily the export rebound depended on semiconductors. Exports on a customs basis rose 53.4 percent from a year earlier to $87.82 billion in May. Semiconductor exports jumped 167.7 percent to $37.29 billion, accounting for more than 40 percent of total customs-cleared exports. The increase in semiconductor exports alone accounted for roughly three quarters of the overall export gain from a year earlier.
Exports of electrical and electronic products more than doubled to $47.61 billion, while information and communications devices rose 103.9 percent to $6.59 billion. Outside the technology sector, petroleum product exports rose 49.1 percent to $5.44 billion, while chemical and steel products posted moderate gains. But the recovery remained uneven, with passenger cars, auto parts and machinery all declining from a year earlier. Passenger car exports fell 7.5 percent to $5.49 billion, while auto parts declined 7.8 percent to $1.48 billion. Machinery and precision equipment exports also dropped 4.9 percent to $5.59 billion.
By destination, exports to China rose 80.8 percent to $18.89 billion, while shipments to Southeast Asia increased 74.4 percent to $29.02 billion. Exports to the United States climbed 59.4 percent to $16 billion. Exports to the European Union rose only 3.2 percent, while shipments to the Middle East fell 7.5 percent.
Imports on a customs basis rose 20.7 percent to $60.79 billion in May. Raw material imports increased 22.1 percent, while capital goods imports rose 28 percent. Consumer goods imports gained only 1.8 percent. Crude oil imports rose 24.8 percent in value terms, even as import volume fell 22.9 percent, as the average import price of crude oil surged 61.9 percent from a year earlier. Semiconductor-related imports also remained strong. Semiconductor imports rose 61.1 percent, while imports of chipmaking equipment increased 54.9 percent.
The financial account showed a $31.08 billion increase in net assets in May. Portfolio investment net assets rose $30.89 billion, as South Korean residents increased overseas portfolio investment by $6.24 billion, led by equities. Foreign investors reduced portfolio investment in South Korea by $24.65 billion, led by a $31.05 billion decline in equity investment. The BOK also highlighted foreign selling of domestic stocks as the largest on record, showing that the record current account surplus coincided with heavy equity outflows.
Reserve assets decreased by $1.73 billion in May.
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