▲ Current account surplus widens on export growth
As the semiconductor boom continues, South Korea's current account has broken its record for the second-largest surplus in history in just one month.
According to preliminary balance of payments data released by the Bank of Korea on the 8th, the current account surplus for August stood at $46.11 billion (approx. 61.7 trillion won).
This marks the second-largest level on record, following June ($49.73 billion), which recorded the all-time monthly high.
The previous second-largest was July ($42.08 billion).
The current account surplus has exceeded $40 billion for three consecutive months.
The cumulative surplus from January to August this year reached $279.2 billion, nearly four times that of the same period last year ($69.67 billion).
Yoo Sung-wook, head of the Economic Statistics Department at the Bank of Korea, explained, Looking at the current account trend through August, it is largely in line with projections. Considering factors such as the trade balance in September recording a larger-than-expected surplus, the current account is expected to achieve its annual target ($450 billion).
Previously, the Ministry of Trade, Industry and Energy announced that September exports rose 83.5% from the same period last year to $120.94 billion, setting a record high.
However, Yoo added, Large-scale dividends are scheduled in the fourth quarter due to corporate shareholder returns, and for companies with high foreign ownership, these dividends could be processed as primary income account payments. It is also necessary to take into account the volatility of oil prices following the recent Middle East conflict.
He stated, The fact that merchandise exports have exceeded $100 billion for three consecutive months has been led by semiconductors. While semiconductor export volumes and price levels are very high, whether this trend will continue depends on semiconductors.
Breaking down the August current account by item, the goods balance recorded a surplus of $46.81 billion, also ranking as the second-largest on record following June ($478.9 billion).
Exports ($104.8 billion) increased by 82.1% from a year earlier, exceeding $100 billion for three consecutive months.
By item, based on customs clearance, high growth rates were seen in computer peripherals like SSDs (366.8%), semiconductors (206.1%), and petroleum products (64.9%).
Conversely, passenger cars (-30.1%) and ships (-45.2%) shifted to a decline.
By region, exports grew in China (119.4%), Southeast Asia (91.7%), and the United States (89.2%).
Imports increased by 22.4% from a year earlier, as the upward trend in raw material and capital goods imports continued while consumer goods also shifted to an increase.
Capital goods imports rose 42.9%, led by semiconductor manufacturing equipment (96.5%), semiconductors (70.6%), and information and communication devices (42.6%).
Raw material imports increased by 13.1%, mainly driven by coal (42.7%), non-ferrous metals (30.3%), crude oil (21.1%), and chemical products (22.8%), while consumer goods imports grew 4.3% with increases in grains (9.5%) and durable consumer goods (7.1%).
The services account recorded a deficit of $1.68 billion, narrowing compared to the same month last year (-$2.24 billion) and the previous month (-$1.97 billion).
Among the services account, the travel deficit widened to $770 million from the previous month (-$340 million), but the overall deficit narrowed as the transportation and intellectual property rights accounts improved.
The transportation balance increased its surplus from $60 million in the previous month to $520 million in August due to rising export freight rates, while the intellectual property rights account deficit decreased from $540 million in the previous month to $390 million in August.
The primary income account surplus decreased from $4.35 billion in July to $1.92 billion in August due to the payout of quarterly securities investment dividends.
Financial account net assets (assets minus liabilities) increased by $40.23 billion, recording an increase similar to the previous month ($40.32 billion).
For direct investment, domestic investment abroad increased by $6.22 billion, while foreign investment in Korea decreased by $1.61 billion.
For portfolio investment, domestic investment abroad increased by $16.6 billion, centered on stocks, while foreign investment in Korea decreased by $4.85 billion, centered on bonds.
The increase in domestic overseas portfolio investment marked the second-largest on record since October last year ($17.29 billion).
This was driven by sustained net stock purchases and the largest-ever bond investment.
Domestic investment in overseas stocks rose by $10.15 billion, and debt securities investment increased by $6.44 billion.
The increase in debt securities investment surpassed that of May last year ($6.31 billion) to set an all-time high.
Foreign investment in domestic stocks fell by $470 million as the temporary effect of SK hynix's ADR (American Depositary Receipt) issuance faded, shifting to a decline for the first time in a month following July ($5.98 billion increase).
Foreign investment in debt securities decreased by $4.38 billion as arbitrage incentives worsened.
(Photo: Provided by Bank of Korea, Yonhap News)
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