Semiconductor exports increased by 53% in January

The current account has maintained a surplus for nine consecutive months, largely driven by a substantial rise in semiconductor exports and a rebound in previously weak exports to China. However, the service balance has been in deficit for 21 consecutive months due to increased outbound travelers.

The Bank of Korea (BOK)'s preliminary international balance of payments statistics, released on Friday, show a current account surplus of $3.05 billion for January. This extends the surplus streak to nine months since May last year. Although the surplus halved from December's $7.41 billion, this reduction is linked to seasonal factors such as the end-of-year export performance wrap-up, with expectations for a resurgence in February.

The goods balance, a major component of the current account, recorded a surplus of $4.24 billion, shifting from a deficit of $7.35 billion a year ago. Exports, which increased by 14.7% compared to the same period last year, significantly contributed to this surplus, marking the first double-digit export growth rate since May 2022. Meanwhile, imports fell by 8.1% to $5.098 billion.

The BOK anticipates a $5.2 million current account surplus for the year. "The current account is likely to sustain its surplus momentum in the first half of this year, mainly due to the goods balance," said Song Jae-chang, the head of Financial Statistics at the Bank. "Given the expected increase in the current account surplus in February, it appears to be in line with the Bank's prediction of a sustained surplus trend."