South Korea saw its largest-ever monthly current account surplus in February, reaching $23.19 billion, driven by a semiconductor upcycle and robust exports, as per data from the Bank of Korea. This surplus marked a significant increase from January’s $13.26 billion. The country’s winning streak of current account surpluses has now extended to 34 consecutive months since May 2023, the second-longest in history.
The goods account surplus in February hit a record high of $23.36 billion, with exports surging by 29.9 percent year-on-year to $70.37 billion, while imports rose by 4 percent to around $47 billion. Notably, chip exports skyrocketed by 157.9 percent compared to the previous year, with IT products and computer peripherals also showing substantial increases.
South Korea’s financial statistics department head, Yoo Sung-wook, highlighted that the monthly current account surplus exceeding $20 billion for the first time was mainly due to record semiconductor exports, despite fewer working days in February. The average daily semiconductor exports in February surpassed the figures from the supercycle years of 2018 and 2022, standing at $1.33 billion.
The services account, however, recorded a deficit of $1.86 billion in February, primarily attributed to a rise in overseas travel demand. On the other hand, the primary income account posted a surplus of $2.48 billion, driven by dividend earnings. The financial account showed a notable increase in the country’s net assets by $22.8 billion in February, with overseas direct investment by South Korean residents rising by $3.81 billion.
In securities investment, local investors expanded their overseas holdings, particularly in stocks, by $8.64 billion, while foreign investors reduced their investments by $11.94 billion to capitalize on recent gains. Looking ahead, the impact of the Middle East conflict may start affecting imports from April onwards, especially with the potential influence of rising global oil prices.
