The latest trade data show that in May, South Korea’s current account has not only swung into the black, but it logged the largest surplus seen in two years and eight months on the back of robust chip exports.
Our Lee Soo-jin explains.
South Korea recorded its largest current account surplus in over two years in May on the back of strong exports.
Preliminary data released by the Bank of Korea on Friday showed that the country’s overall current account balance in May recorded a surplus of 8-point-9 billion U.S. dollars.
That’s the largest surplus seen in 32 months, or since September 2021.
It’s also a turnaround in just one month from April when the current account swung into the red for the first time in a year on the back of increased dividend payments to foreign investors.
By category, the goods balance which tracks imports and exports of products recorded a surplus of 8-point-7 billion dollars , up from 1-point-8 billion dollars the previous year and marking the 14th consecutive month of a surplus.
Exports rose 11-point-1 percent year-on-year in May to 58-point-9 billion dollars on the back of strong demand for semiconductors.
Outbound shipments of chips rose 53 percent compared to the previous year, with exports of other items such as information and communication equipment, oil products, and automobiles also seeing an upward trend.
And by region, exports to Southeast Asia saw the largest rise, followed by the United States and China.
And the services balance, once again recorded a deficit of 1-point-2 billion dollars , which was larger than that of a year ago when it came to 910 million, but less when compared to one month ago when it logged 1-point-6 billion dollars.
A Bank of Korea official said that he expects the current account balance to continue to record a surplus with the ongoing rise in exports.
“June will see a large surplus in the current account balance. We forecast in May that the current account balance for the first half to record a surplus of 27-point-9 billion dollars and as of May it had already logged a surplus of 25-point-4 billion dollars.”
He added that while the higher-than-expected current account surplus in the first half may lead to the nation surpassing the country’s projection for its annual current account balance,
there are still uncertainties ahead such as fluctuations in international oil prices and growth in the overall global economy.
Lee Soo-jin, Arirang News.
Source : Arirang TV, https://www.arirang.com/news/view?id=272931
Arirang TV(public institution's name)'s public work is used according to KOGL