Korea posts largest current account surplus in nearly 7 yrs in June

[Photo by Kim Ho-young]

South Korea’s current account surplus expanded to its largest level in nearly 7 years thanks to solid exports.

According to data released by the Bank of Korea (BOK) on Wednesday, the country’s current account surplus stood at $12.26 billion in June, the largest since $12.3 billion in September 2017.

The goods account recorded a surplus of $11.4 billion in June, marking the 15th consecutive month of surplus since April 2023.

Exports totaled $58.8 billion in June, up 8.7 percent from the same period last year, marking the ninth straight month of on-year growth since October 2023.

Semiconductor exports surged by 50.4 percent in June from a year ago, while those of information and communication equipment jumped 26 percent, petroleum products 8.5 percent, and passenger vehicles 0.5 percent.

Exports to Southeast Asia gained 27.9 percent in June from a year ago, those to the United States 14.8 percent and China 1.8 percent.

Exports of machinery and precise equipment, however, fell 1.4 percent in June, fine-processed materials 7.5 percent, and steel products 18 percent.

Imports stood at $47.3 billion in June, down 5.7 percent from a year ago.

Raw material imports declined by 6.6 percent, led by decreases in steel, chemicals, and coal. Imports of capital goods also fell by 4.6 percent. Imports of consumer goods, such as grains and passenger vehicles, contracted by 15.6 percent.

The services account registered a deficit of $1.62 billion in June, with the travel sector showing a deficit of $900 million as travel revenue fell more sharply than travel payments.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, showed a surplus of $2.6 billion in June, up from $1.7 billion in May, as quarterly dividend payments to foreign investors are no longer taken into account.

Net assets in the financial account increased by $12.2 billion in June, the largest increase since October 2020.

Direct investment of Koreans overseas increased by $4.8 billion while that of foreigners in Korea fell by $370 million.