South Korea Posts Second-Largest Current-Account Surplus on Record in July

South Korea recorded a current-account surplus of $42.08 billion in July, keeping the figure above $40 billion for a second straight month and marking the strongest July on record.

The preliminary balance-of-payments data, released by the Bank of Korea on Sept. 4, showed that July’s surplus ranked second overall, behind June’s record $49.73 billion. The goods balance also produced a surplus above $40 billion for the second consecutive month, reaching $40.43 billion, its highest July result.

Goods exports totaled $100.45 billion. Although exports fell from the previous month because June had received a boost from concentrated quarter-end shipments, they remained above $100 billion. Information-technology exports, including semiconductors, rose 140.6% from a year earlier, while non-IT exports increased 18.3%.

Imports reached $60.02 billion. Raw materials and capital goods continued to grow, rising 29.1% and 36.7%, respectively. Consumer-goods imports fell 3%, their first decline in 15 months, limiting the overall increase.

The services account posted a $1.97 billion deficit. Better results in telecommunications, computer and information services did not offset a $340 million travel deficit. The travel balance turned negative after three months as the peak overseas travel season and the designation of Constitution Day as a public holiday increased departures. The primary-income surplus expanded to $4.35 billion, led by $3.83 billion in dividend income, as overseas sales affiliates of semiconductor companies reported higher operating profits. The financial account showed a $40.32 billion increase in net assets, with residents’ overseas investment rising and foreign investment in South Korea declining overall.