◆… Photo = Courtesy of Clip Art Korea
Last year, the current account surplus with the United States and Southeast Asia reached an all-time high. This is mainly due to the significant increase in exports, mainly in semiconductors and information and communication equipment.
According to the ‘2021 regional balance of payments (provisional)’ announced by the Bank of Korea on the 24th, the size of the current account surplus last year was $88.3 billion, an increase from $75.9 billion in the previous year.
The size of the current account surplus with the United States increased significantly from $32.8 billion in the previous year to $44.96 billion. This is the highest record ever, surpassing the $41.5 billion mark in 2014. The goods account surplus widened due to an increase in exports of semiconductors, and the service account deficit narrowed due to the improvement of the transportation account. The service account posted a deficit of $4.48 billion, the lowest since the deficit of $3.3 billion in 2005.
China’s current account surplus expanded to $23.61 billion from $17.25 billion in the previous year. In the goods account, the surplus expanded only slightly due to an increase in imports of chemical products, etc., but the service and basic income balance improved due to a strong transport account and an increase in dividend income, respectively. It is the first time in three years since 2018 that the current account surplus has expanded compared to the previous year.
The size of the current account deficit with Japan increased sharply from $20.2 billion last year to $22.14 billion. In the commodity balance, the deficit widened as imports of semiconductor manufacturing equipment increased, and the main income balance also increased due to the increase in dividend payment by local corporations.
The current account with the EU turned from a deficit of $5.9 billion in the previous year to a surplus of $1.27 billion. The service and basic income balances were sluggish, but the goods balance expanded surplus thanks to strong exports of chemical products, ships, and automobiles.
The size of the current account surplus in Southeast Asia reached $102.05 billion, exceeding $93.91 billion in 2018, achieving the highest level in history. The balance of goods ranked second in history after US$92.73 billion in 2018 as commodity exports increased mainly in semiconductors and information and communication devices. The service balance recorded $5.83 billion in surplus of $1.72 billion in 2020 due to an increase in transportation income due to an increase in export freight rates, ranking first in history. The primary income balance also recorded a record of $10.25 billion, surpassing the $9.99 billion surplus in 2019 due to increased dividend income.
The size of the current account deficit in the Middle East increased from $28.26 billion in the previous year to $48 billion. The trade deficit widened as imports of crude oil and petroleum products increased significantly due to the rise in international oil prices.
South America’s current account turned into a surplus of $290 million from a deficit of $440 million in the previous year. The deficit widened in the commodity balance due to an increase in imports of crude oil and minerals, but the surplus in the primary income balance increased as dividend income from local subsidiaries increased.
Park Chang-hyeon, head of the balance of payments team at the BOK’s Economic Statistics Bureau, said, “The US’ surplus has expanded due to the improvement of the balance of goods and services. There is not much difference in the rate of increase, but there is a difference in size. The service balance contributed to the reduction of the deficit as the transportation balance improved,” he said.
He added, “In Southeast Asia, the current account surplus expanded as the balance of goods, services, primary income, and transfer income all improved together.”
Meanwhile, foreign direct investment by Koreans last year was $608.82 billion, a sharp increase from $34.83 billion in the previous year, mainly in the United States, Southeast Asia, and the EU. Foreign direct investment in Korea amounted to $16.82 billion, mainly in the EU, the United States, and Southeast Asia, and the rate of increase increased from $8.76 billion in the previous year.
Foreign securities investment by Koreans last year was $78.41 billion, mainly in the United States and the EU, and significantly increased from $58.91 billion in the previous year. Overseas stock investment increased significantly, led by the US, while overseas bond investment turned to increase in the EU and other countries, but the increase in the US and China decreased. Foreigners’ investment in domestic securities stood at USD 58.81 billion, mainly in Southeast Asia and the EU, and the rate of increase increased significantly from USD 17.16 billion in the previous year‰磯
