July Current Account Surplus Hits $42.08 Billion, Second Highest Ever...Merchandise Exports Surpass $100 Billion Again (Update)

Current Account Surplus Continues for 38 Months Since May 2023
Goods Surplus Hits $40.43 Billion, Second Highest on Record and All-Time July High
Ongoing Strength Led by Semiconductors: Merchandise Exports Reach $100.45 Billion
Outbound Tra

In July, South Korea's current account surplus exceeded 42 billion dollars. Although it did not surpass the previous month's record high, the surplus remained above 40 billion dollars for the second consecutive month, marking the second largest in history. This result was driven by sustained improvement in the goods account, primarily led by increased semiconductor exports, and a wider primary income surplus.

According to the provisional "International Balance of Payments for July 2026" announced by the Bank of Korea on September 4, South Korea posted a current account surplus of 42.08 billion dollars in July. While this figure fell short of the previous month's record of 49.73 billion dollars, it increased sharply by 30.13 billion dollars compared to the same period last year, claiming the second-highest figure overall and setting a new record for the month of July. The current account has now been in surplus for 38 consecutive months since May 2023, marking the second-longest continuous surplus on record.

The main contributor to this performance was the goods account, which forms the largest portion of the current account. The goods account posted a surplus of 40.43 billion dollars in July, making it the second highest ever and the largest for the month of July.

Exports of goods amounted to 100.45 billion dollars, up 65.3% from the same month last year. Due to a base effect from strong quarter-end exports in the previous month, exports were down compared to the prior month, but they still surpassed the 100 billion dollar mark. Based on July customs clearance data, IT product exports surged 140.6% year-on-year, while non-IT exports rose 18.3%. IT products saw growth centered on computer peripherals and SSDs (344.5%), semiconductors (176.3%), and wireless communication devices (51.2%). Non-IT exports rose in petroleum products (35.7%), chemical products (19.1%), steel products (11.3%), machinery and precision instruments (8.4%), and passenger cars (8.4%).

Imports of goods totaled 60.02 billion dollars. While imports of raw materials (up 29.1%) and capital goods (up 36.7%) continued to rise, consumer goods imports decreased by 3.0%, marking their first decline in 15 months and limiting the overall import growth.

The service account posted a deficit of 1.97 billion dollars. Despite improvements in communications, computer, and information services, the travel account returned to a deficit of 340 million dollars, widening the overall service account deficit. The travel account shifted to a deficit for the first time in three months due to increased outbound travelers during the summer peak travel season and the additional public holiday for Constitution Day.

The primary income account posted a surplus of 4.35 billion dollars, largely on the back of a 3.83 billion dollar surplus in dividend income. The surplus in dividend income was driven by semiconductor companies' overseas subsidiaries recording higher operating profits, resulting in a significant increase in direct investment dividend receipts.

Net external financial assets, calculated as assets minus liabilities, increased by 40.32 billion dollars. Although the growth slowed compared to the previous month, this figure still marked the second highest on record. Direct investment assets increased by 3.36 billion dollars, a slower pace than before, while direct investment liabilities decreased by 780 million dollars.

Securities investment assets increased by 13.57 billion dollars, with growth accelerating as both equity and debt securities rose. Equity investment grew by 12.33 billion dollars, led by general government and non-financial corporations, while debt securities grew by 1.24 billion dollars, bolstered by rising attractiveness of foreign bonds.

Securities investment liabilities increased by 8.17 billion dollars. Although growth in debt securities liabilities slowed, both equities and debt securities increased overall, supported in part by the issuance of SK hynix ADRs in the United States. Equity liabilities increased by 5.98 billion dollars, reversing a recent selling trend in domestically issued stocks and spurred by the SK hynix ADR issuance, while debt securities liabilities increased by 2.19 billion dollars, with the rate of growth limited by reduced arbitrage incentives.

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