September Current Account Surplus for 17 Consecutive Months... Possible to Achieve $82 Billion Surplus This Year (Comprehensive)

Bank of Korea to Announce 'September 2021 Balance of Payments (Preliminary)' on the 5th

[Asia Economy Reporter Jang Sehee] The current account balance recorded a surplus in September, continuing its surplus streak for 17 consecutive months. The cumulative surplus from January to September (USD 70.13 billion) is the largest since 2016. Accordingly, the Bank of Korea forecasted that achieving the annual current account surplus projection of USD 82 billion for this year is possible.

According to the "September 2021 Balance of Payments (Provisional)" released by the Bank of Korea on the 5th, the current account surplus in September was USD 10.07 billion. The surplus amount decreased by USD 270 million compared to a year earlier. This marks the 17th consecutive month of surplus since May last year. The current account balance is a statistic that sums all economic transactions between countries, including exports and imports of goods and services, as well as capital and labor.

Hwang Sangpil, Director of the Economic Statistics Bureau at the Bank of Korea, analyzed, "The cumulative current account surplus from January to September this year recorded the largest surplus in five years," adding, "This is due to increased exports and transportation performance despite the resurgence of COVID-19."

Last month's current account surplus increased as the service account improved despite a reduction in the goods account surplus. The goods account surplus, which indicates the gap between exports and imports, was USD 9.45 billion. The surplus decreased by USD 2.65 billion compared to a year earlier.

Exports recorded USD 56.44 billion. Due to the global economic recovery, exports have increased for 11 consecutive months compared to the same month last year. Based on customs clearance, exports of petroleum products increased by 77.2% compared to a year ago. Steel products rose by 32.3%, chemical products by 29.2%, information and communication devices by 35.1%, and semiconductors by 26.9%.

Imports were USD 46.98 billion, an increase of USD 9.78 billion compared to the same month last year. Due to the sharp rise in raw material prices such as natural gas and crude oil, imports centered on raw materials increased for 10 consecutive months. By item, imports of raw materials and capital goods increased by 61.5% and 10.0%, respectively. Imports of consumer goods also rose by 7.3%. The increase in imports outpaced that of exports, reducing the goods account surplus.

Last month, the service account recorded a deficit of USD 20 million. In contrast, the transportation account surplus expanded by USD 1.77 billion compared to the same month last year, reaching USD 2.06 billion. This is the highest ever. The transportation account has shown a surplus for 15 consecutive months since July 2020 (USD 10 million), thanks to increased income from maritime cargo transportation.

The primary income account, reflecting flows of wages, dividends, and interest, recorded a surplus of USD 750 million, expanding by USD 60 million compared to a year earlier. Dividend income increased as domestic companies earned more dividends from overseas subsidiaries, recording USD 10 million in the dividend income account.

The financial account net assets, indicating capital inflows and outflows, increased by USD 9.78 billion in September. In direct investment, domestic investors' overseas investments increased by USD 4.35 billion, while foreign investors' domestic investments decreased by USD 340 million.

Securities investment by domestic investors abroad increased by USD 7.76 billion, continuing an 18-month consecutive growth trend. This was due to expanded increases in both overseas stock and bond investments. Foreign investors' domestic securities investment recorded USD 7.83 billion, turning to an increase. Foreign investors' domestic stock investment turned to an increase, and bond investment also expanded.

Meanwhile, the Bank of Korea expects to achieve the annual current account surplus forecast of USD 82 billion this year. Director Hwang stated, "Future current account balances may face risks such as rising raw material prices and global supply chain disruptions," but added, "However, the surplus trend is expected to continue, making it likely to comfortably achieve the USD 82 billion surplus forecast by the Research Department this year."

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