Last Year Current Account Surplus of $88.3 Billion... December Exports and Imports Reach Record Highs

Bank of Korea Announces Preliminary Balance of Payments for December Last Year

Busan Port Sinsundae Pier
[Image source=Yonhap News]

Last year, the annual current account recorded a surplus of $88.3 billion. Although it increased by more than $12 billion compared to the previous year, it fell short of the Bank of Korea's annual current account target. In December last year, the current account showed a surplus of $6.06 billion, continuing a surplus streak for 20 consecutive months, but the surplus amount decreased by more than $6 billion compared to a year earlier, dropping to about half.

According to the preliminary balance of payments statistics released by the Bank of Korea on the 10th, last year's current account recorded a surplus of $88.3 billion. This is a 16.3% ($12.4 billion) increase from the previous year ($75.9 billion). However, it did not reach the Bank of Korea's initial target ($92 billion). This is interpreted as the result of imports increasing faster than exports, which reduced the surplus in the goods balance.

In December last year, the current account showed a surplus of $6.06 billion. The current account has maintained a surplus for 20 consecutive months since May 2020. However, the surplus amount shrank by $6 billion compared to a year earlier ($12.06 billion). The goods balance surplus, which is the difference between exports and imports, was $4.48 billion, down $6.12 billion from the same month last year ($10.6 billion) and $1.59 billion from the previous month ($6.07 billion).

Exports reached a record high of $62.43 billion, an increase of $9.9 billion compared to the same month last year ($52.53 billion). Exports have increased for 14 consecutive months, centered on petroleum products, steel, and semiconductors, due to the global economic recovery. Based on December customs clearance exports, petroleum products increased by 78.2% year-on-year, steel products by 34.6%, semiconductors by 34.1%, chemical products by 25.4%, and information and communication devices by 16.5%.

Imports also reached a record high, increasing by $16.02 billion compared to the same month last year ($41.93 billion). Imports have increased for 12 consecutive months as raw material imports surged and capital goods and consumer goods imports continued to expand. This is interpreted as an increased import burden due to rising international oil prices. In fact, based on December customs clearance imports, raw material imports surged by 63.8%, including petroleum products (168.6%), coal (145.6%), gas (120.4%), and crude oil (86.2%). Semiconductors (38.5%), grains (47.1%), and direct consumer goods (20.5%) also increased, but home appliances fell by 3.3% and passenger cars by 28.9%, respectively.

The services balance showed a deficit of $240 million, narrowing the deficit by $200 million from a $440 million deficit in the same month last year. The transportation balance recorded a surplus of $1.61 billion, expanding the surplus by $1.19 billion compared to the same month last year ($430 million).

The financial account, which indicates capital inflows and outflows, showed a net asset increase of $72.3 billion. Domestic investors' overseas direct investment increased by $12.06 billion, and foreign investors' domestic investment increased by $2.21 billion. Overseas securities investment by domestic investors, including stocks and bonds, increased by $12.51 billion, and domestic investment by foreigners increased by $6.26 billion.

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