In May, South Korea’s current account surplus exceeded $10 billion, marking the 25th consecutive month of surplus and the third-largest surplus for May on record.

The increase in the goods balance surplus is attributed to strong semiconductor exports and decreased imports. The primary income balance turned to surplus as seasonal factors such as dividend payments to foreigners disappeared.

According to preliminary international balance of payments statistics released by the Bank of Korea on July 4, the current account surplus for May was recorded at $10.14 billion. This significantly surpasses both the previous month ($5.7 billion) and May of last year ($9.09 billion). For May, it is the third-largest surplus after 2021 ($11.31 billion) and 2016 ($10.49 billion).

The cumulative current account surplus for the first five months of this year ($35.11 billion) is about 29.7% higher than the same period last year ($27.06 billion).

By category, the goods balance, which accounts for the largest portion of the current account, showed a surplus of $10.66 billion in May. This is about $1.7 billion more than the previous month ($8.99 billion) and over $1.8 billion more than May of last year ($8.82 billion).

Despite a slight decrease in exports, imports also decreased, leading to an increase in the goods balance surplus. Exports recorded $56.93 billion, a 2.9% decrease from May last year, due to the poor performance of automobiles and steel affected by U.S. tariffs, despite the good performance of IT items such as semiconductors. Imports ($46.27 billion) decreased by 7.2% compared to the previous month due to reduced imports of raw materials such as coal (-31.6%), petroleum products (-30.0%), and crude oil (-14.0%) resulting from falling energy prices.

The services balance recorded a deficit of $2.28 billion. While the deficit decreased compared to the previous month (-$2.83 billion), it was larger than the same month last year (-$1.22 billion). Within the services balance, the travel balance (-$950 million) showed an increased deficit compared to April (-$500 million) due to an increase in overseas travelers during the May holidays.

The primary income balance turned from a deficit of $190 million in April to a surplus of $2.15 billion in May. This is because the seasonal factor of concentrated dividend payments to foreigners in April disappeared.

Net assets (assets – liabilities) in the financial account increased by $6.71 billion in May. In terms of direct investment, domestic investors’ overseas investments increased by $4.13 billion, while foreign investors’ domestic investments increased by $320 million.

In securities investment, domestic investors’ overseas investments increased by $10.09 billion, mainly in bonds, while foreign investors’ domestic investments also increased by $12.27 billion, primarily in bonds.