South Korea's current account surplus surpassed $30 billion for the first time on record, driven by strong exports of information technology (IT) products led by semiconductors. The travel balance also swung into surplus for the first time in 11 years as foreign tourists flocked to concerts including a performance by K-pop band BTS in Seoul's Gwanghwamun.
According to preliminary balance of payments data released by the Bank of Korea (BOK) on Wednesday, the current account posted a surplus of $37.33 billion in March. The figure marked the largest since the statistics began and exceeded the previous record of $23.19 billion set in February by more than $14 billion. The cumulative current account surplus for the first three months of the year reached $73.78 billion, 3.8 times the $19.49 billion recorded in the same period last year.
The goods balance was the main driver of the surplus. The goods account recorded a surplus of $35.07 billion in March, also the largest on record. Exports came in at $94.32 billion, up 56.9 percent from a year earlier and the highest level ever.
IT products including semiconductors and computer peripherals led the overall export growth. Semiconductor exports surged 149.8 percent from a year earlier, while computer peripheral exports rose 167.5 percent.
The services account posted a deficit of $1.29 billion, narrower than the previous month. The travel balance in particular recorded a surplus of $140 million, swinging into the black for the first time in 136 months since November 2014.
The BOK cited the spring travel peak season and an increase in foreign tourists as the key factors. Demand from overseas fans visiting Korea surged around the BTS comeback concert held at Seoul's Gwanghwamun Square on March 21, significantly boosting spending on accommodation, dining and shopping.
The number of foreign visitors to Korea topped 2 million in March for the first time. Travel revenue in March jumped 68.3 percent to $2.6958 billion from $1.6017 billion the previous month, the largest since the statistics began in 1980.
"The number of arrivals increased in March due to events including the BTS concert, and even looking at Myeong-dong recently, there are a great many foreigners," said Kim Young-hwan, director general of the BOK's economic statistics department. "For now, this does not appear to be a one-off trend."
Strong exports led by semiconductors are expected to continue in April, but high oil prices stemming from the Middle East conflict pose a risk. The import price of crude oil jumped about 45 percent to $112.3 per barrel in April from $75.4 in March. "If the rise in energy prices is prolonged, it could act as downward pressure on the annual current account," Kim said.
