South Korea's goods exports topped $100 billion for the first time in history in June, pushing the current account surplus to a new all-time high for the second consecutive month. Foreign investors' profit-taking on domestic shares also drove equity-related portfolio investment liabilities to a record monthly decline for the second month running.
The current account posted a surplus of $49.73 billion in June, the Bank of Korea said Thursday. That surpassed the previous record of $38.61 billion set in May by $11.12 billion, or 28.8%, breaking the all-time high for the second straight month.
"Centered on the goods balance, the current account surplus expanded significantly from the previous month, setting a new all-time record for two consecutive months," the Bank of Korea said.
The current account has remained in surplus for 38 consecutive months, marking the second-longest unbroken surplus run since the 2000s.
By category, the goods balance reached $47.89 billion, also a record high, surpassing the previous peak of $37.86 billion in May by $10.03 billion, or 26.5%. Exports were particularly strong, hitting $112.37 billion — the first time the figure has ever exceeded $100 billion — a surge of 84.5% from $60.92 billion in the same month a year earlier. Imports over the same period rose 38.6% to $64.48 billion.
Looking at year-on-year growth in customs-cleared exports, IT shipments rose 160.4% in June, led by computer peripherals (up 282.7%) and semiconductors (up 196.9%). Non-IT exports also rose 18.6%, driven by petroleum products (up 47.5%), chemical products (up 18.6%) and steel products (up 17.9%).
On the imports side, capital goods rose 35.3%, led by semiconductors (up 64.1%), information and communications equipment (up 44%) and semiconductor manufacturing equipment (up 42.4%). Raw materials climbed 30.5%, driven by coal (up 63%) and crude oil (up 50.3%). Consumer goods rose 16.4%.
The services account posted a deficit of $1.29 billion in June, widening from a $1.09 billion shortfall the previous month. However, the gap was more than halved compared with the same month a year earlier, when the deficit stood at $2.8 billion. The Bank of Korea said the deficit widened as telecommunications, computer and information services and intellectual property royalties swung to a deficit, offsetting improvements in transportation and travel.
The travel balance swung to a surplus of $440 million, up $390 million from $50 million the previous month, as the number of inbound visitors increased while outbound travelers declined partly due to higher fuel surcharges. The intellectual property royalties balance swung to a deficit of $440 million, as royalty receipts fell sharply relative to payments after settlements concentrated in the prior month were completed.
The primary income balance grew 50.7%, from $2.17 billion to $3.27 billion, driven mainly by the dividend income balance of $2.56 billion. The dividend income surplus widened as dividend receipts increased while dividend payments on securities investment declined due to a base effect from the previous month's quarterly dividend payouts.
In the financial account, net assets rose by $46.71 billion in June, a larger increase than the $31.08 billion recorded in May. The June expansion surpassed the previous record of $36.99 billion set in March, setting a new all-time high for the first time in three months.
By category, direct investment saw domestic investors' overseas holdings rise by $8.01 billion, while foreign investment in Korea increased by $4.63 billion. In portfolio investment, domestic investors' overseas holdings grew by $3.56 billion, centered on equities, while foreign investors' domestic holdings fell by $26.32 billion, also centered on equities. Foreign investors' domestic equity holdings in particular dropped by $31.61 billion, surpassing the previous record decline of $31.05 billion in May and setting a new all-time high for the largest monthly decrease. "Profit-taking sales drove net selling to a record high," the Bank of Korea said.
Elsewhere, financial derivatives rose by $6.11 billion. In other investment, assets increased by $14.15 billion, led by other assets, while liabilities grew by $8.26 billion, centered on cash and deposits. Reserve assets rose by $1.45 billion.
kimstar@heraldcorp.com
