Seoul: South Korea's current account surplus expanded in May, despite a decline in exports, primarily due to decreasing global oil prices and an increase in dividend income, as reported by central bank data on Friday. The surplus reached US$10.14 billion, up from $5.7 billion in April, according to the figures compiled by the Bank of Korea.
According to Yonhap News Agency, this marks the 25th consecutive month of a current account surplus for South Korea, which has maintained a monthly surplus since May 2023. The surplus recorded in May ranks as the third-largest on record, following $11.31 billion in 2021 and $10.49 billion in 2016. The cumulative current account surplus for the first five months of the year was $35.11 billion, compared to $27.06 billion during the same period last year.
The goods account saw a $10.66 billion surplus in May, with exports declining by 2.9 percent year-on-year to $56.93 billion, while imports decreased by 7.2 percent to $46.27 billion, largely due to reduced imports of raw materials. Meanwhile, the services account recorded a $2.28 billion deficit in May, attributed to increased demand for overseas travel. The primary income account, which includes wages of foreign workers, dividend payments, and interest income from overseas, posted a $2.15 billion surplus in May.
BOK official Song Jae-chang highlighted that the declines in exports and imports are linked to external factors such as the global trade environment and falling oil prices. He noted that the impact of U.S. tariffs, particularly on automobiles and steel, is becoming increasingly noticeable and is expected to intensify in the latter half of the year.
In April, the U.S. administration under President Donald Trump initiated reciprocal tariffs on partner nations, including 25 percent duties on South Korean goods. However, the new tariff scheme was paused to allow for bilateral negotiations. South Korea and the U.S. have agreed to work towards a "package" deal on trade and related issues before July 8, when the 90-day pause on reciprocal tariffs concludes. Nevertheless, a separate 10 percent baseline tariff and 25 percent duties on steel, aluminum, and auto-related products remain in place. Trade Minister Yeo Han-koo is set to visit the U.S. this week for last-minute negotiations.