The present account recorded a surplus of $8.92 billion in May.


The Bank of Korea introduced on July 5 that the present account recorded a surplus of $8.92 billion in May, in response to the “Balance of Payments (preliminary).” This marks a major turnaround from the $290 million deficit in April and is the best surplus in 32 months because the $9.51 billion surplus in September 2021.


Exports performed a vital position on this financial shift. In May, exports amounted to $58.95 billion, an 11.1% improve in comparison with the identical month final yr. Imports, alternatively, decreased by 1.9% to $50.2 billion. Consequently, the products account surplus reached $8.75 billion, additionally the best in 32 months. The Bank of Korea emphasised, “While exports of steel products continued to decline, those of semiconductors, information and communication devices, petroleum products, and passenger cars continued to increase.” In truth, semiconductor exports in May amounted to $11.55 billion, a 53.0% improve in comparison with the identical interval final yr.


Seasonal components additionally performed a task within the surplus. The major earnings account, which confirmed a deficit of $3.37 billion in April, turned to a surplus of $1.76 billion in May, driving the general improve. The major earnings account had proven a brief deficit in April because of seasonal components corresponding to concentrated international dividends. However, these components dissipated in May, leading to a surplus.


On the opposite hand, the service account didn’t flip right into a surplus because of a continued deficit within the journey account. The service account recorded a deficit of $1.29 billion in May, with the journey account deficit amounting to $860 million.


Net belongings within the monetary account elevated by $7.58 billion, marking a turnaround in only one month. In direct funding, abroad investments by home residents elevated by $6.33 billion, the most important improve in 25 months. Foreign investments in Korea additionally elevated by $790 million. In securities funding, abroad investments by home residents elevated by $7.1 billion, primarily in shares, whereas international investments in Korea elevated by $2.32 billion, primarily in bonds. The funding sentiment in the direction of dangerous belongings expanded, resulting in a major improve in abroad investments by home residents.


Additionally, spinoff monetary merchandise elevated by $700 million, whereas different investments noticed belongings lower by $1.54 billion, primarily in loans, and liabilities lower by $320 million, primarily in money and deposits. Reserve belongings decreased by $2.2 billion.

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