August Gyeongsang Balance of Payments Surplus for Four Consecutive Months... Continuing 'Recession-Type Surplus'

Bank of Korea Announces Preliminary August Balance of Payments Statistics
4.81 Billion USD Surplus... Four Consecutive Months
Imports Declined More Than Exports

A scene of container unloading work at Busan Port Sinsundae Pier on the 1st of last month.
[Image source=Yonhap News]

South Korea's current account recorded a surplus for four consecutive months as imports decreased more than exports. However, the cumulative current account surplus from January to August this year shrank to less than half compared to the same period last year.

According to the preliminary balance of payments statistics released by the Bank of Korea on the 11th, the current account surplus for August this year was $4.81 billion.

After posting a deficit of $790 million in April, the surplus continued for four months in May ($1.93 billion), June ($5.87 billion), and July ($3.74 billion).

However, the cumulative current account surplus from January to August was $10.98 billion, down about 54% from $23.66 billion during the same period last year.

By category, the goods balance showed a surplus of $5.06 billion, marking five consecutive months of surplus since April.

This is a recession-type surplus caused by imports decreasing more than exports.

Exports in August were $53.75 billion, down 6.5% compared to the same month last year, while imports were $48.68 billion, down 21%. Both the amount and rate of decrease were higher for imports than exports.

In exports, passenger cars (based on customs clearance, 28.1%) continued to perform well, but performance worsened mainly in petroleum products (-35.1%) and semiconductors (-21.2%), continuing a 12-month consecutive decline compared to the same month last year.

By region, exports increased to the Middle East (7%), the European Union (EU, 2.7%), and the United States (2.4%), but exports to China (-20%) and Latin America (-11%) significantly decreased.

Imports decreased for raw materials (-27.6%), capital goods (-16.2%), and consumer goods (-19.0%), showing a decline for six consecutive months compared to the same month last year.

Capital goods imports, including semiconductors (-21.3%) and information and communication devices (-27.2%), decreased by 16.2%, while consumer goods imports such as grains (-25.6%) and passenger cars (-37.4%) also shrank by 19.0%.

(Data provided by Bank of Korea)

The services balance showed a deficit of $1.6 billion. Although the deficit narrowed compared to July (-$2.53 billion), it was larger than the deficit in the same month last year (-$1.29 billion). The travel balance recorded a deficit of $1.14 billion, slightly reduced from the previous month (-$1.43 billion), and the intellectual property rights balance posted a surplus of $40 million.

The primary income balance recorded a surplus of $1.47 billion, mainly from interest income. However, the surplus decreased compared to the previous month ($2.92 billion) and the same month last year ($2.59 billion).

The net financial account (assets minus liabilities) increased by $5.73 billion in August.

Direct investment saw an increase of $3.41 billion in overseas investment by domestic investors and $1.7 billion in domestic investment by foreigners.

In securities investment, overseas investment by domestic investors increased by $3.05 billion, while domestic investment by foreigners decreased by $1.01 billion.

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