Korea logs current account surplus in November as chips rebound

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Korea logs current account surplus in November as chips rebound

Published: 09 Jan. 2024, 09:30 Updated: 09 Jan. 2024, 16:15

JIN MIN-JI
jin.minji@joongang.co.kr

Containers are stacked at a port in Incheon on Nov. 8 [NEWS1]

Korea logged a current account surplus for seventh consecutive month in November on the back of an increased trade surplus led by semiconductor exports.

The country’s current account surplus reached $4.06 billion in November, narrowing from the previous month's surplus of $6.8 billion, according to preliminary Bank of Korea (BOK) data released Tuesday.

The goods account racked up $7.01 billion surplus as exports rose 7 percent and imports were down by 8 percent from a year earlier. The country logged $5.35 billion in goods account surplus the previous month.

The trade surplus was boosted by a 10.8 percent jump in chip exports over the same period, bouncing back from a 4.8 percent on-year fall the previous month. November marked the first time on-year chip exports had entered positive territory in 16 months.

Automobile exports expanded 22.9 percent over the same period, up from 21 percent the previous month.

Outbound shipments to the United States grew 24.7 percent on year in November to $10.95 billion, while exports to China inched down 0.2 percent over the same period to $11.36 billion.

The services account posted a $2.13 billion deficit from a loss of $1.25 billion the previous month due to weak manufacturing services and travel accounts.

The primary income account, which tracks the wages of foreign workers, dividend payments from overseas and interest, recorded a $150 million deficit as earned dividends decreased. The secondary income account registered a $660 million deficit.

Korea’s current account in 2023 logged $27.43 billion through November from the beginning of the year, up from $27.15 billion over the same period a year earlier.

The BOK had projected that Korea would report a $30 billion surplus in 2023.

“The trade account logged around $4.4 billion in surplus, and the primary income account is also projected to report a surplus,” said Lee Dong-won, head of the BOK's financial statistics division, about December's current account estimate. “The deficit in the services account will expand, but the account surplus [in December] is expected to be larger than in November.”

The annual current account surplus for 2023 “is expected to easily surpass the BOK projection,” Lee added, citing the 19.1 percent growth of chip exports and recovery of outbound shipments to China.

The BOK noted that uncertainties remain both internally and externally, but it expects the current account surplus to grow this year from 2023.

The Korean central bank, in November, projected that country’s current account would log a $49 billion surplus this year.

BY JIN MIN-JI [jin.minji@joongang.co.kr]