February’s current account surplus of 80.3 billion dollars… Strong exports of semiconductors and semiconductors

Input 2021.04.07 08:00

In February, Korea’s current account surplus recorded $8.30 billion. The current account surplus is recording a surplus for 9 consecutive months compared to the same month last year. Compared to last year, the surplus has expanded by $1.63 billion. The impact of strong exports, mainly for passenger cars and semiconductors, was large.

According to the February 2021 balance of payments (provisional) announced by the Bank of Korea on the 7th, the current account in February was estimated to be a surplus of $8.30 billion. The current account surplus has maintained a high level compared to a year ago for the ninth month since June last year. The current account is a statistic that sums up all economic transactions, such as capital and labor, along with the import and export of goods and services between countries.

The commodity balance, which represents the gap between exports and imports, was $60.5 billion. Compared to last year’s February ($6.6 billion), the surplus fell by $550 million. The increase in imports exceeded the increase in exports, and the scale decreased slightly compared to the previous year.

Exports recorded 4.81 billion dollars, an increase of 9.5% (3.76 billion dollars) from the same month last year (4.91 billion dollars). With the recovery of global trade continuing, exports are showing robustness, mainly for major items such as passenger cars, semiconductors, and chemicals. On a customs clearance basis, exports of passenger cars increased by 48.5%, 9.6% for information and communication devices, and 12.6% for semiconductors compared to a year ago. Chemicals increased by 27.3%. Income was $4.19 billion, an increase of 14.0% ($4.31 billion) from the same month of the previous year ($3.69 billion).

The service balance recorded a surplus of $130 million. It recorded a surplus after 75 months since November 2014 (+90 million dollars). Due to improvements in transportation balance, etc., it improved significantly compared to the same month last year (1.44 billion). As transportation imports, mainly for sea and air cargo, increased significantly, the transportation balance turned to a surplus of 810 million dollars. The transport balance has been in the black for eight consecutive months since July 2020. The travel account deficit was $340 million, a decrease of $130 million compared to a year ago. The aftermath of a new coronavirus infection (Corona 19) blocking the road to overseas travel continues.

The main income balance, which reflects the flow of wages, dividends, and interest, was $2.12 billion, an increase of $900 million from a year ago. As dividend income from overseas subsidiaries of domestic companies increased, the dividend income balance ($1.5 billion) increased by $980 million compared to a year ago.

Financial account net assets, representing capital inflows and outflows, rose by $7.43 billion in February. In direct investment, foreign investment by Koreans decreased by $3.33 billion and domestic investment by foreigners decreased by $130 million. Securities investment continued to increase for 11 consecutive months, with Koreans’ overseas securities investment increased by $9.38 billion. Foreign investors’ investment in securities in Korea increased by $7 billion and turned to an increase in one month.