Korea’s current account surplus maintains gains in July

[Photo by Yonhap]

South Korea’s current account continued upwards for a third consecutive month in July as imports saw a greater decline compared to exports, central bank data showed Friday.

But the surplus from the beginning of the year until July was only a quarter of its value from a year ago.

The country’s current account surplus hit $3.58 billion in July, according to preliminary data from the Bank of Korea (BOK).

The current account maintained its positive streak for the third month since May 2023.

The cumulative current account surplus for the first seven months of the year, however, was $6.01 billion, down 77 percent from $26.5 billion in the same period a year ago.

The goods account recorded a surplus of $4.28 billion in July, maintaining its surplus trend for a fourth straight month.

Exports fell 14.8 percent on year to $8.79 billion in the month, declining for the 11th month in a row.

Exports of petroleum products plunged 41.8 percent in July from a year ago, while chips, chemical engineering and steel products saw 33.8 percent, 16.4 percent, and 12.6 percent falls respectively.

Exports to China fell 25.1 percent, Southeast Asia 20.9 percent, the European Union 8.4 percent, the U.S. 8.1 percent, and Japan 6 percent.

Outbound shipments of passenger vehicles rose 15.7 percent.

Imports declined 22.7 percent to $46.1 billion in July from a year ago, outpacing exports in both volume and decline rate.

Imports of raw materials plunged by 35.7 percent in July from a year ago due to falling energy import prices. Imports of gas fell 51.2 percent, coal 46.3 percent, crude oil 45.8 percent, and petroleum products 40.9 percent.

Imports of capital goods also fell 12.5 percent as chips dropped 22.6 percent and chip manufacturing equipment 13.7 percent. Those of consumer goods dropped 12.1 percent, led by passenger vehicles that fell 19.2 percent.

The services account posted a deficit of $2.53 billion in July.

The travel account registered a deficit of $1.43 billion, nearly double that of $840 million a year ago amid the easing of COVID-19 restrictions.

The primary income account registered a surplus of $2.92 billion in July, down from $4.85 billion in June but up from $2.62 billion in the same month last year.

The surplus in dividend income reduced from $4.23 billion to $2.56 billion within the month.

Net assets in the financial account gained $3.72 billion in July.

Korean nationals’ direct investment overseas increased by $2.42 billion, while that of foreigners in Korea rose $1.65 billion.

In securities investment, Koreans’ overseas investments rose $6.9 billion, the largest increase in 14 months, while foreigners’ investment in Korea rose by $2.6 billion.