In a significant economic update, Korea has revealed a current account surplus surpassing $35 billion for the previous year, outstripping initial projections. The data, released by the Bank of Korea (BOK), indicates a robust 37% increase from the prior year, with December marking the eighth consecutive month of surplus, reaching $7.41 billion. This growth is attributed to a buoyant trade surplus and increased overseas dividends.
Shin Seung-chul, Director-General of the BOK's economic statistics division, highlighted the substantial expansion of the surplus despite declines in both exports and imports. Forecasts suggest a further increase in the annual surplus to $49 billion this year and $59 billion next year, driven by resilient exports, particularly in the IT sector.
The goods account exhibited notable growth, doubling to $34.09 billion, driven by increased exports of automobiles and vessels. Although chip exports saw a year-on-year decline, December witnessed a significant surge.
While exports to China and Japan saw declines, shipments to the United States and the Middle East experienced growth. Shin anticipates potential shifts in export destinations, with countries like the United States and Vietnam gaining prominence.
Challenges persist in the services account, with deficits in the travel and transport sectors contributing to a $25.66 billion deficit. Changes in spending patterns among outbound travelers, particularly from China, have impacted the deficit.
On a positive note, the primary income account demonstrated robust growth, reflecting increases in wages of foreign workers, overseas dividend payments, and interest income.
Korea's resilient trade performance amidst global uncertainties underscores its ability to navigate challenging dynamics while maintaining a healthy surplus.