Based on an analysis of International Monetary Fund (IMF) figures, the central bank said the country's current account surplus reached US$116.63 billion during the period between April and June and surpassed the combined surpluses of Germany and Japan for the first time, second only to China's $193.72 billion among 36 major economies.
Germany ranked third with a surplus of $52.28 billion, followed by Japan with $50.62 billion. Their combined surplus of $102.89 billion was $13.74 billion less than South Korea's. It was the first time South Korea's surplus exceeded the combined surpluses of Germany and Japan since comparable data for all three countries became available in the first quarter of 1996.
South Korea's surplus more than quadrupled from $28.39 billion a year earlier, while Germany's and Japan's surpluses grew by 11.9 percent and 5 percent, respectively. The gap between South Korea's surplus and Germany's widened to $64.35 billion, the largest since comparable records began in 1976, while the gap with Japan reached $66.01 billion, the widest since 1996.
The trend continued into the third quarter, with South Korea posting a combined current account surplus of $88.19 billion in July and August, exceeding the combined $80.82 billion surplus of Germany and Japan by $7.37 billion.
South Korea also narrowed the gap with China, with its second-quarter surplus amounting to 60.2 percent of China's, up sharply from 22.7 percent a year earlier and the highest ratio since the fourth quarter of 2019.
The country also narrowed the gap with China, as its second-quarter surplus amounted to 60.2 percent of China's, up sharply from 22.7 percent a year earlier and the highest since the fourth quarter of 2019.
The BOK attributed the surplus to a boom in semiconductor exports, which sharply boosted the country's external earnings.
Semiconductors have been the main driver of the increase, buoyed by strong artificial intelligence (AI)-related demand. Semiconductor exports surged 181.6 percent from a year earlier to $113.89 billion in the second quarter, before jumping 218.7 percent to $148.02 billion in the third quarter, according to the Ministry of Data and Statistics.
The strong performance has also lifted the outlook for the whole year. The IMF earlier this month projected South Korea's current account surplus at about $421.95 billion, second only to China's $863.21 billion.
The BOK has also painted a rosy picture of the country's annual current account surplus, which could approach $500 billion.
Despite the optimistic outlook, economists cautioned that the surplus does not necessarily reflect a broad improvement in the country's economy, saying that its heavy reliance on semiconductors leaves it vulnerable to fluctuations in global demand and prices.
They warned that the record surplus, driven by export windfalls, could shrink rapidly if the AI boom loses momentum or intensifying competition pushes prices down. They stressed the need to diversify exports for more balanced and sustainable growth and to prepare for changes in the global semiconductor market as potential rivals like China's ChangXin Memory Technologies (CXMT) expand their capabilities.
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