In November last year, the current account recorded a surplus of $9.3 billion, continuing a surplus streak for seven months. The goods account led the overall surplus with over $9.7 billion. However, the primary income account saw a reduction in surplus due to dividend payments from the previous month, and the services account widened its deficit due to the base effect of the previous month, which included the Chinese National Day holiday.
According to the 'balance of payments (preliminary)' released by the Bank of Korea on the 8th, the current account recorded a surplus of $9.3 billion in November last year. The current account has maintained a surplus for seven consecutive months since recording a deficit of $290 million in April due to increased foreign dividends.
The surplus amount has experienced fluctuations. In June, it reached a surplus of $12.56 billion, the largest in six years and nine months, but in July and August, the surplus shrank to $8.97 billion and $6.6 billion, respectively. In September, it expanded again to $10.94 billion, but then decreased to $9.78 billion in October and $9.3 billion in November.
The current account is a statistic that aggregates the export and import of goods and services, as well as all economic transactions, including capital and labor, between nations. It is an indicator of a country's fundamental strength, mainly composed of the goods account, services account, primary income account, and transfer income account.
By item, the goods account (exports - imports) was recorded at $9.75 billion, driving the current account surplus. The surplus widened by $1.63 billion from the previous month ($8.12 billion) and by $2.87 billion compared to a year ago ($6.88 billion). The goods account has been in surplus for 2 years and 1 month.
Exports amounted to $57.1 billion, a 1.2% increase from a year ago. Exports have been on the rise for 14 consecutive months since October last year. Semiconductor exports, which account for 20% of total exports, surged by 29.8% year-on-year, leading the increase, and shipments of ships and electrical and electronic products increased by 76.5% and 16.2% respectively. However, shipments of petroleum products (-18.6%), passenger cars (-14.1%), and machinery and precision instruments (-12.5%) declined.
Imports decreased for two consecutive months. In November last year, imports totaled $47.35 billion, a 4.4% decline from a year ago. While imports of capital goods rose by 11.3%, those of raw materials (-10.2%) and consumer goods (-6.3%) decreased. By item, imports of semiconductor manufacturing equipment surged by 77.9%, while imports of semiconductors rose by 24.5% and machinery and precision instruments increased by 19%. In contrast, imports of petroleum products fell by 19.2% and chemical products decreased by 17.2%.
The services account, which encompasses transactions such as travel, transportation, and intellectual property royalties, recorded a deficit of $209 million. The deficit widened by $36 million from the previous month ($173 million). The previous month's effects of the Chinese National Day holiday have dissipated, resulting in a larger deficit.
The primary income account, reflecting wages, dividends, and interest flows, recorded a surplus of $194 million. The surplus decreased by $151 million from the previous month ($345 million). The interest income account expanded by more than $40 million, rising from $105 million to $147 million. Meanwhile, the dividend income account sharply fell from $249 million to $60 million due to the impacts of quarterly dividend payments.
The transfer income account recorded a deficit of $30 million. The deficit expanded by $25 million from the previous month (-$5 million). In comparison to a year ago (-$660 million), it has reduced to half that level. The transfer income account signifies the differences in non-compensated exchanges such as grants and remittances between residents and non-residents.
The financial account net worth, indicating capital inflows and outflows, increased by $976 million. Direct investment rose by $284 million. In direct investment, domestic investment abroad increased by $284 million, while foreign investment in the domestic market decreased by $1 million. In securities investments, domestic investment abroad increased by $39 million, whereas foreign investment in the domestic market decreased by $2.12 billion.