[News Today] RECORD CURRENT ACCOUNT SURPLUS

[LEAD]
In June, Korea posted its largest current account surplus in nearly seven years. A surge in semiconductor demand drove exports up by over 8%, while a decrease in imports helped widen the surplus.

[REPORT]
In June, Korea posted a current account surplus of 12.26 billion U.S. dollars, the largest in nearly seven years and the third largest of all time.

It was mainly bolstered by robust exports, which grew 8.7 percent on-year.

Song Jae-chang/ Bank of Korea
Exports remained robust on the back of record-high chip exports, which were due to rising memory chip prices and the growing demand for AI-related industries.

Paradoxically, sluggish domestic consumption was a positive factor for the current account surplus.

In June, the nation's imports dropped more than five percent from a year ago.

The Bank of Korea explained that the decrease was driven by falling automobile imports, coupled with a drop in raw material prices and a delayed recovery in domestic consumption.

The overall current account balance improved thanks to improvement in goods account, which is calculated by subtracting imports from exports.

On the back of this trend, the nation's current account surplus totaled 37.7 billion U.S. dollars in the first half of this year, which is ten billion dollars greater than the central bank's earlier outlook.

But analysts predict the surplus will likely decrease a bit in the latter half of the year.

Cho Young-moo/ LG Business Research
The nation's exports and dependence on the U.S. have considerably increased. The U.S. economy will highly likely slow down over time. In that case, Korea's current account surplus will decrease, in turn.

The BOK said that a possible slowdown in AI investment, a driving force behind bullish chip demand, and the Middle East conflict are the factors that will affect the nation's exports in the second half.