Korea's current account back to black as chip exports surge

Economy

Published: 05 Jul. 2024, 14:08

Korea's current account back to black as chip exports surge

Containers are piled up in the yards of the Sinseondae and Gamman terminals at Busan Port. [NEWS1]

Korea’s current account swung back to black in May on the back of surging chip exports, logging the largest surplus in 32 months.

The goods account remained in surplus for the 14th month in a row.

The current account posted a surplus of $8.92 billion in May, returning to surplus from the previous month’s deficit of $290 million, according to preliminary data released by the Bank of Korea on Friday.

It marked the largest surplus since $9.51 billion logged in September 2021.

In April, Korea’s current account logged its first loss in 11 months since April of last year, when the country posted a deficit of $1.37 billion. The downturn has been attributed to seasonal factors, including dividend payments for foreign investors.

For the first five months of this year, the current account registered a cumulative surplus of $25.47 billion, compared to a deficit of $5.03 billion during the same period a year prior.

The goods account logged a $8.75 billion surplus, remaining positive for the 14th straight month, following $5.11 billion the previous month. The total goods account surplus for this year so far came to $32.8 billion, a turnaround from a deficit of $7.29 billion in the same period last year.

Exports jumped 11.1 percent in May from a year earlier to $58.95 billion, with robust chip demand continuing to drive growth.

Semiconductor exports soared 53 percent on year to $11.55 billion, according to data compiled by the Korea Customs Service. The auto sector also rose 5.3 percent to $6.29 billion, and ship exports soared 109.7 percent to $1.97 billion.

By destination, exports to the United States rose 15.6 percent on year to $10.93 billion, bringing the cumulative figure this year to $53.28 billion. Exports to Southeast Asian countries also soared 30.4 percent to $15.41 billion, while exports to China rose 7.7 percent to $11.38 billion.

Imports shrank 1.9 percent on year to $50.2 billion.

The services account deficit inched down to $1.29 billion from a deficit of $1.66 billion in April, bringing the cumulative loss this year to $9.81 billion.

The travel account deficit was $860 million in May, compared to $790 million in the same period a year ago.

The primary income account — which tracks the net income earned in the country through wages as well as dividend payments and interest income from abroad against the respective outflow from Korea — returned to a surplus of $1.76 billion after logging a deficit of $3.37 in April.

Net assets increased by $7.58 billion in May, with non-Koreans’ direct investments in Korea growing by $6.33 billion and residents’ direct investments overseas increasing by $790 million.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]