Korean current account surplus at 19-month high on exports recovery

South Korea’s current account surplus hit a 19-month high in October as goods exports reported their first on-year growth in 14 months amid signs of recovery in overseas sales of semiconductors, the country’s top export item, central bank data showed on Friday.

South Korea logged a current account surplus of $6.1 billion on a seasonally adjusted basis in October, the largest since March 2022, the Bank of Korea said. Goods exports of Asia’s fourth-largest economy grew 8.6% to a seasonally adjusted $57.8 billion on-year, marking the first annual growth since August of last year.

Goods imports fell 6.2% to a seasonally adjusted $52.1 billion, resulting in a goods account surplus of $5.7 billion, the largest since August.

“Exports of passenger cars and petroleum products increased while declines in semiconductors and chemical products slowed,” the central bank said in a statement.

Chip exports rebounded in November, ending 15 months of drops and adding to expectations of a recovery in the global chip industry. The country is home to the world’s two largest memory chipmakers – Samsung Electronics Co. and SK Hynix Inc.

NARROWER SERVICES ACCOUNT DEFICIT

The services account logged a deficit of $1.5 billion on a seasonally adjusted basis in October, nearly half the $2.9 billion shortfall seen the previous month, as increasing foreign tourists, especially from Japan and Southeast Asia, cut the travel account deficit.

The primary income account, which tracks the wages of foreign workers, dividend payments from overseas and interest income, jumped 46% to a seasonally adjusted $2.1 billion from the prior month on higher returns from overseas investments.

In the financial account, South Koreans' overseas direct investments increased by $1.7 billion, smaller than the previous month’s $2 billion, while foreigners’ investments in the country grew by $2 billion, far more than the prior $352.1 million.

South Koreans' portfolio investments in other countries rose by $2.8 billion in October but foreigners’ portfolio investments in local markets fell by $1.6 billion as they cut stock investments by $2.5 billion.

Write to Jin-gyu Kang at josep@hankyung.com
 

Jongwoo Cheon edited this article.