South Korea's current account surplus in the second quarter exceeded the combined surpluses of Germany and Japan, two of the world's manufacturing powerhouses. The gain came as a semiconductor export boom pushed the trade surplus to record levels, while expanded overseas investment lifted dividend and interest income above past levels. The International Monetary Fund projects that Korea's annual current account surplus will rank second in the world after China this year and post the largest increase among 190 countries.
The IMF put Korea's second-quarter current account surplus at $116.63 billion, according to the Bank of Korea's economic statistics system on the 25th. That ranked second worldwide after China's $193.724 billion and exceeded the combined totals of third-place Germany at $52.276 billion and fourth-place Japan at $50.615 billion.
It marks the first time Korea's current account surplus has topped the combined figure for the two countries since 1996, the earliest year for which statistics are available for all three, the central bank said. The gap between Korea and Germany widened to $64.35 billion in the second quarter, the largest since records began in 1976. The gap with Japan stood at $66.01 billion, also the widest since 1996.
The trend has continued into the third quarter. Korea's current account surplus over the two months of July and August reached $88.19 billion, exceeding the combined German and Japanese total of $80.82 billion by $7.37 billion. In the first quarter, Korea's surplus of $74.38 billion also topped Germany's $74.11 billion and Japan's $61.502 billion.
Korea's surplus has overtaken those of Germany and Japan, traditional manufacturing trade powers, largely because of a sharp improvement in its trade balance driven by the semiconductor boom. In June, the final month of the second quarter, exports surpassed $100 billion for the first time, and the trade surplus swelled to $35.909 billion, about four times the figure a year earlier. Exports came in in the high $90 billion range in July and August before breaking through $120 billion in September, suggesting the gap between Korea and the two countries will widen further toward the end of the year.