South Korea's Current Account Surplus Hits Record High in April

South Korea's current account surplus surged to $28.29 billion in April, marking the second-highest surplus ever recorded and following a record-breaking surplus of $37.93 billion in March. This sustained positive trend highlights the strength of the nation's economy, particularly its export sector.

The cumulative current account surplus for the first four months of 2024 has already surpassed $100 billion, exceeding the total surplus for the entire previous year. This achievement is attributed to a robust performance in exports, which saw a significant year-on-year increase of 54.5% in April, reaching $90.59 billion. The goods balance, a key component of the current account, recorded an all-time high surplus of $33.88 billion, driven primarily by strong sales of semiconductors and related IT products, as well as increased prices for petroleum products.

Despite the strong performance in goods trade, the services balance recorded a deficit of $2.42 billion. The travel balance, which had previously shown a surplus after 136 months, reverted to a deficit of $30 million in April. However, the Bank of Korea noted that the number of inbound travelers exceeded 2 million, indicating a substantial improvement compared to the previous year. The primary income balance also contributed to the deficit, showing a shortfall of $2.53 billion, largely due to dividend income payments.

Officials expressed optimism about the continued strength of the economy, projecting that the May current account surplus could rival that of March. The robust export performance, particularly in semiconductors, is expected to sustain the positive trade balance. In a comparative analysis, South Korea's first-quarter current account surplus of $74.4 billion placed it second only to China among major economies, and its annual surplus is projected to be higher than Taiwan's for the first time in years.