Exports increase by double digits for the first time in 20 months. Demand for overseas travel, including winter vacation, increases. Service balance has been negative for 21 months.
The current account has been in surplus for 9 consecutive months. This was largely due to the significant increase in semiconductor exports and the recovery of sluggish exports to China. However, as the number of overseas travelers increases, the service balance has been in deficit for 21 months.
According to the provisional balance of payments statistics announced by the Bank of Korea on the 8th, the current account balance in January of this year was recorded as a surplus of $3.05 billion. It has been in surplus for 9 consecutive months since May of last year. The surplus has decreased to half of last December ($7.41 billion), but it is expected to increase again in February as it is due to seasonal factors such as the end of export performance at the end of the year.
The merchandise balance, which accounts for the largest portion of the current account, had a surplus of $4.24 billion. It turned into a surplus compared to a year ago (-$7.35 billion). In particular, exports increased by 14.7% compared to the same period last year, increasing the size of the product balance surplus. This is the first time since May 2022 that exports have shown a double-digit growth rate. Imports decreased by 8.1% to $50.98 billion.
Based on customs clearance, there was a notable increase in exports of semiconductors (52.8%) and passenger cars (24.8%). By region, exports to the United States (27.1%) and Southeast Asia (24.4%) increased significantly, and exports to China also increased 16.0% compared to the same period last year, returning to an upward trend for the first time in 20 months.
On the other hand, the service balance has been negative (-) for 21 consecutive months. The service balance in January was -$2.66 billion, a larger deficit than the previous month (-$2.54 billion). This is because the number of domestic outbound travelers has increased more significantly than the number of foreign travelers visiting Korea. In particular, the travel balance deficit (-$1.47 billion) increased from the previous month (-$1.34 billion) due to increased demand for overseas travel during winter vacation.
The Bank of Korea predicts that the current account will have a surplus of $52 billion this year. Song Jae-chang, head of the Bank of Korea’s Financial Statistics Department, said, “The current account surplus is expected to continue in the first half of this year (January to June), centered on the product balance,” adding, “Considering that the current account surplus is expected to expand in February as well, the Bank of Korea “It appears that this will be in line with the projected surplus trend,” he said.
Reporter Shin A-hyung [email protected]
2024-03-08 16:40:00
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