July Current Account Surplus of $3.58 Billion... Both Exports and Imports Decline

Provisional Balance of Payments Statistics for July 2023

South Korea's current account recorded a surplus of $3.58 billion in July. Imports decreased more than exports, continuing a surplus for three consecutive months.

According to the preliminary balance of payments statistics released by the Bank of Korea on the 8th, the current account surplus in July was $3.58 billion.

Looking specifically at the July current account, the goods balance showed a surplus of $4.28 billion, maintaining a surplus trend for four consecutive months since April this year. However, this was due to imports decreasing more than exports, with both exports and imports declining.

Exports amounted to $50.43 billion, down $8.79 billion (14.8%) compared to the same month last year. Passenger cars (15.7%) continued to perform well, but petroleum products (-41.8%), semiconductors (-33.8%), and chemical products (-16.4%) led an 11-month consecutive year-on-year decline.

Imports were $46.15 billion, down $13.59 billion (-22.7%) from the same month last year. The Bank of Korea explained, "Imports of raw materials, capital goods, and consumer goods all decreased, marking a decline for five consecutive months compared to the same month last year."

The services balance posted a deficit of $2.53 billion, mainly due to travel, slightly narrowing from the previous month's deficit of $2.61 billion. This marks the 14th consecutive month of deficit since May last year. The travel balance showed a deficit of $1.43 billion, expanding from the $1.28 billion deficit in June.

The primary income balance has been in surplus for three consecutive months since turning positive in May. The primary income balance recorded a surplus of $2.92 billion, mainly from dividend income. However, the increase was smaller compared to June ($4.85 billion).

The financial account, which indicates capital inflows and outflows, showed a net asset increase of $3.72 billion. Direct investment saw an increase of $2.42 billion in domestic investors' overseas investments and $1.65 billion in foreign investors' domestic investments. As a result, direct investment, which had turned to a decrease in June for the first time in five years and six months, returned to surplus.

Securities investment saw domestic investors' overseas investments increase by $6.9 billion, the largest in 14 months since May last year. Among these, stocks increased by $4.04 billion, marking the largest increase in eight months since November last year. Foreign investors' domestic investments rose by $2.6 billion. In stocks, there was an increase of $810 million, turning positive. This was influenced by increased investment mainly in the KOSDAQ due to eased risk aversion sentiment. As a result, securities investment increased by $4.3 billion. The Bank of Korea explained, "The expansion of domestic investors' overseas stock investments and the slowdown of foreign investors' overseas bond investments led to an increased growth."

[Image source=Yonhap News]

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