Q1 Current Account Surplus Hits Record High at $73.78 Billion... April Outlook: Semiconductors > Middle East War (Comprehensive)

March Current Account Surplus Reaches $37.33 Billion, Surpassing February's Record
Exports, Goods Surplus, and Current Account Surplus All Hit Record Highs, Led by Semiconductors
Travel Account Turns Surplus for the First Time in 136 Months, Dri

In March 2026, South Korea recorded a current account surplus of 37.33 billion dollars. This marked the first time the monthly surplus exceeded 30 billion dollars, continuing a record-breaking rally for the second consecutive month. The so-called "semiconductor super cycle" led to the goods account posting another record surplus, which drove the current account figures higher. Additionally, improvements in other current account components—including an expanded primary income surplus and a turn to surplus in the travel account for the first time in 136 months—contributed to a reduced services deficit.

As a result, South Korea's current account surplus for the first quarter of this year reached 73.78 billion dollars, marking the largest first-quarter surplus for the third consecutive quarter. Although there is typically a seasonal decline in the goods account surplus in the first quarter compared to the previous quarter, this year saw a significant increase due to stronger-than-expected exports. The goods account posted a surplus of 73.61 billion dollars in the first quarter, roughly matching the current account surplus. This marks the fourth consecutive quarter of record surpluses.

On the 8th, at the Bank of Korea in Jung-gu, Seoul, an explanatory meeting on the provisional balance of payments for March 2026 was held. (From left) Kim Junyoung, Manager of the Balance of Payments Team; Kim Younghwan, Director of the Economic Statistics Division 1; Park Sunggon, Head of the Balance of Payments Team; and Lim Yeonbin, Manager of the Balance of Payments Team attended and responded to questions from the press. Bank of Korea

Record-High Current Account Surplus in March...Semiconductors Lead, Petroleum Products Follow

According to the "Provisional Balance of Payments for March 2026" released by the Bank of Korea on May 8, South Korea's current account surplus in March was 37.33 billion dollars. This is the largest surplus on record, more than 60% above the previous record of 23.19 billion dollars in February. This figure is nearly four times higher than the same period last year (9.58 billion dollars). The country has now posted a surplus for 35 consecutive months since May 2023, marking the second-longest surplus streak since 2000.

As before, the record current account surplus was driven by a record-high goods account surplus. In March, the goods account posted a surplus of 35.07 billion dollars, far surpassing the previous record (23.36 billion dollars in February). During the same period last year, the surplus was 9.69 billion dollars. Export value also reached a record 94.32 billion dollars, up 56.9% year-on-year, marking an all-time high. IT products (up 111.7%)—especially semiconductors and computer peripherals—continued to perform well, while non-IT products (up 15%) also showed strong growth thanks to more working days and a rise in petroleum product prices. In March, based on customs clearance data, exports of computer peripherals (SSDs) grew by 167.5% and semiconductors by 149.8% year-on-year. Among non-IT exports, petroleum products (up 69.2%), chemical products (up 9.1%), steel products (up 5.9%), and passenger cars (up 1.1%) all increased.

Containers are piled up at Pyeongtaek Port in Gyeonggi Province. Photo by Yonhap News.

Imports totaled 59.24 billion dollars, up 17.4% year-on-year. Capital goods imports continued to increase, especially in the semiconductor sector, while raw materials—led by chemical products—returned to growth for the first time in six months, expanding the overall increase. Capital goods (up 23.6%) saw gains in information and communications equipment (up 51.6%), transportation equipment (up 34.8%), and semiconductors (up 34.5%). For raw materials (up 8.5%), despite the Middle East conflict, energy import prices continued to fall due to time lags in supply, with crude oil and gas prices dropping by 5.3% and 19.2%, respectively. Meanwhile, imports of chemical products (up 20.5%) rose due to increased demand for pharmaceuticals, semiconductors, and battery materials. Among consumer goods (up 2.1%), direct consumer goods rose by 10.2%, while durable consumer goods like gold (down 50.8%) fell slightly by 0.7%.

Kim Younghwan, Director of Economic Statistics Division 1 at the Bank of Korea, stated, "There are concerns about logistics disruptions after April, but the impact of rising prices could lead to an increase in goods imports, so we need to monitor import and export trends in April and May." He further noted, "Depending on how much volume is actually brought in amid logistics disruptions, the situation could change." The customs-cleared import price of crude oil surged by about 45% in April compared to the previous month.

The group BTS held a concert on March 21 at Gwanghwamun Square in Seoul to celebrate the release of their fifth studio album 'ARIRANG'. Photo by Yonhap News

"Impact of Major K-pop Concerts by BTS"—Travel Account Posts Surplus for First Time in 136 Months

The services account posted a deficit of 1.29 billion dollars, narrowing from a deficit of 1.86 billion dollars in the previous month. The travel account (surplus of 140 million dollars) turned positive for the first time since November 2014 (50 million dollars), as the number of foreign visitors soared due to an influx of spring tourists and a major K-pop concert by BTS. Kim noted, "For the first time, the number of arrivals in March exceeded 2 million, and since arrivals have been steadily increasing from January to March, this does not appear to be a one-off improvement in the travel account, but we need to continue monitoring." The other business services account (deficit of 1.33 billion dollars) reverted to a deficit as payments for research and development (R&D) and intercompany business services, which had temporarily fallen the previous month, increased again.

The primary income account recorded a surplus of 3.58 billion dollars, higher than the previous month's 2.48 billion dollars. The dividend income account (2.7 billion dollars) saw its surplus widen due to increased dividend receipts from both direct and portfolio investments.

The financial account, which reflects net assets after subtracting liabilities from assets, increased by 36.99 billion dollars, a significant jump from the previous month's increase of 22.8 billion dollars. Direct investment saw outbound investment by Korean residents rise by 8.89 billion dollars and inbound foreign investment increase by 3.77 billion dollars. In securities investment, outbound investment by Korean residents—mainly in stocks—increased by 4 billion dollars, while inbound foreign investment—mainly in stocks—fell by 34.04 billion dollars. This was attributed to the largest net selling on record of 29.33 billion dollars in stocks, as investors took profits amid concerns about risk in the Middle East and weaker memory demand. Derivatives increased by 5.6 billion dollars. In other investments, assets fell by 1.56 billion dollars, mainly in cash and deposits, while liabilities rose by 8.36 billion dollars, mainly through borrowing. Reserve assets decreased by 1.85 billion dollars.

Middle East Impact to Intensify in April...Not as Pronounced as Semiconductor Export Boom

In April, the seasonal increase in foreign dividend payouts is likely to result in a primary income account deficit. However, since the customs-cleared trade balance remained strong in April, the current account is also expected to maintain a positive trend.

The impact of the Middle East conflict is expected to intensify in April, but both imports and exports are likely to benefit, and the effect is not expected to be as pronounced as the boom in semiconductor exports. Kim explained, "In March, the time lag on energy imports meant there was little impact from the U.S.-Iran conflict and the closure of the Strait of Hormuz, but in April, we are seeing the effects on both imports and exports." However, he noted that it is unlikely to be significant enough to disrupt the overall trend of current account surpluses. Regarding the potential negative impact of the Middle East conflict on the supply of key raw materials for semiconductor production, Kim said, "With concerns about a shortage of semiconductor volumes, companies are increasing facility investment and capital goods imports as well. For now, this trend does not seem likely to be significantly disrupted."

He added that the Middle East conflict could exert downward pressure on the annual current account surplus. "The situation in the Middle East is changing rapidly, but if higher energy prices persist in the long term, it will act as a downward force on the annual current account. We need to keep a close watch on the situation," Kim said.

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