Current account maintains surplus trend in January on chip demand

Containers stacked up at a port in Busan on Feb. 7. Korea reported a current account surplus for the ninth consecutive month in January amid recovery in chip exports. [NEWS1]

Korea logged a current account surplus for the ninth consecutive month in January as exports for chips and cars continued to rebound, though the growth of the positive balance slowed from the previous month.

The country logged a surplus of $3.05 billion in January, slowing from $7.41 billion the previous month, data from the Bank of Korea (BOK) showed on Friday.

The goods account racked up a $4.24 billion surplus in the first month of 2024, following $8.04 billion the previous month.

Exports jumped 14.7 percent in January from a year earlier to $55.52 billion, led by a 52.8 percent surge in chips and 24.8 percent growth in automobiles, while vessels soared 75.8 percent over the same period.

Chip exports recovered on the back of server memory chips as demand started to pick up from the second half of last year, according to the central bank. Increasing demand from China and a rise in semiconductor prices propelled the growth.

Outbound shipments to the United States rose 27.1 percent to $10.24 billion, while those to China jumped 16 percent to $10.68 billion.

Imports declined 8.1 percent over the same period to $50.98 billion, driven by a 11.3 percent drop in inbound shipments of raw materials.

The primary income account, which tracks the wages of foreign workers, dividend payments from overseas and interest income, registered a $1.62 billion surplus in January, slowing from $2.46 billion a month earlier.

The services account deficit expanded to $2.66 billion from a deficit of $2.54 billion in the cited period, driven by the $1.47 billion deficit in the travel account with an increase in overseas travelers.

“January is usually a month when overseas travel grows in time for winter vacation season,” said a spokesperson for the BOK. “The travel account is expected to improve in February as the number of incoming passengers rose on China’s Lunar New Year holiday.”

The current account surplus is expected to expand in February as the trade surplus increased in the month, the central bank said. The current account balance is projected to stay in positive territory based on the goods account in the first half of the year, and the surplus trend will grow more evident with its expansion in the second half of the year.

Last year, the country reported a current account surplus of $35.49 billion, which was higher than the central bank’s estimate of $30 billion.

The BOK forecast the current account surplus to widen to $52 billion this year.

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