South Korea's current account surplus reached a historic monthly high in February, propelled by robust semiconductor exports, particularly memory chips, which expanded the goods trade surplus significantly. This occurred before the onset of conflict in the Middle East began to exert broader effects on energy markets and global shipping.
According to data released by the Bank of Korea on Wednesday, the country's current account surplus for February hit $23.2 billion, setting a new monthly record. The goods account alone contributed a surplus of $23.4 billion, also a record, driven by exports surging nearly 30% year-on-year, far outpacing the 4% growth in imports.
These figures reflect the state of the South Korean economy prior to the full impact of the Middle East conflict, which emerged around late February. Consequently, the February balance of payments data likely captured only limited effects from rising oil prices and broader supply chain disruptions, risks that have since intensified for the trade-dependent economy.
Semiconductors remained the primary driver of strong export growth, fueled by sustained global demand for DRAM and NAND memory chips from South Korea's two memory chip giants, Samsung Electronics and SK Hynix, amid the ongoing artificial intelligence (AI) boom. Spurred by continued global investment in AI and data centers, South Korea's latest monthly chip export data for March showed a dramatic year-on-year increase of 151.4%.
The central bank noted that the sustained sharp rise in exports was mainly led by strong global demand for memory chips, while exports of information and communication equipment also continued to expand. In contrast, exports of chemical products, machinery and precision equipment, and passenger vehicles turned negative.
The services account remained in deficit, posting a shortfall of $1.86 billion, primarily due to deficits in travel services and processing services. Meanwhile, the primary income account recorded a surplus of $2.48 billion, largely attributable to dividend income.
February marked the 34th consecutive month of current account surplus for South Korea, the second-longest streak since the early 2000s. In terms of the financial account, net assets increased by $22.8 billion, as South Korean investors continued to expand their overseas investments, while foreign investors reduced their holdings of domestic Korean stocks.
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