February Current Account Surplus of $8.03 Billion... 10 Consecutive Months of Surplus (Update)

Bank of Korea 'February 2021 Balance of Payments (Preliminary)'
Service Balance Turns Surplus for the First Time in 75 Months

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] The current account balance continued its surplus streak for the 10th consecutive month in February. This was thanks to the continued strong export performance and a significant increase in transportation income after COVID-19, which led the service account to return to surplus for the first time in 75 months.

According to the "February 2021 Balance of Payments (Provisional)" released by the Bank of Korea on the 7th, the current account surplus in February was $8.03 billion, expanding by $1.63 billion compared to the same month last year. The current account has maintained a surplus for 10 consecutive months since May last year. The surplus expansion compared to the same month last year has continued for nine consecutive months.

The goods account, which is the difference between exports and imports of goods, posted a surplus of $6.05 billion. Exports ($44.71 billion) increased by 9.2% ($3.76 billion), driven mainly by petrochemicals, passenger cars, and semiconductors. Imports ($38.66 billion) rose by 12.6% ($4.31 billion) as raw materials increased for the first time in 22 months since April 2019 (2.2%), along with increased imports of capital goods and consumer goods.

While overseas travel expenditures decreased due to the closure of air routes amid COVID-19, freight transportation income increased, resulting in a service account surplus of $130 million, marking the first surplus in 75 months since November 2014 ($90 million surplus).

The transportation account recorded a surplus of $810 million, turning positive compared to the same month last year, while the travel account (-$340 million) saw its deficit shrink by $130 million as the number of outbound travelers plummeted by 93.5%.

The primary income account, which reflects wages, dividends, and interest flows, posted a surplus of $2.12 billion, with the surplus expanding by $900 million due to increased dividend income from domestic companies' overseas subsidiaries.

The financial account net assets (assets minus liabilities), which show capital inflows and outflows, amounted to $7.43 billion. Domestic investors' overseas direct investment increased by $3.31 billion, while foreign direct investment in Korea decreased by $130 million. Domestic investors' overseas securities investment rose by $9.38 billion, marking 11 consecutive months of increase since April 2020. Among these, overseas equity investment increased by $8.23 billion, continuing an 18-month consecutive rise since September 2019. Foreigners' domestic securities investment increased by $7.02 billion; although foreign investment in domestic stocks decreased by $3.2 billion, investment in domestic bonds increased by $10.22 billion, ranking second all-time (first was $11.04 billion in November 2007).

This content was produced with the assistance of AI translation services.