South Korea's Current-Account Surplus Hits Record $61.5 Billion in September

A historic surplus, powered by chips

According to the Bank of Korea, September's current-account surplus rose to $61.5 billion, exceeding August's $46.1 billion and eclipsing the prior monthly mark of $49.7 billion set in June. It is the first time the surplus has crossed $60 billion. Behind the jump: roaring demand for advanced memory chips as global AI investment accelerates, which has made South Korea's growth more dependent on tech tailwinds and helped offset softness elsewhere in the economy.

That reliance comes with a caveat. Questions about how long AI's breakneck spending can last have grown, especially after a Democratic sweep in the US midterm elections raised the chance of tighter scrutiny on unpopular data center projects that could slow the buildout.

Trade flows that stand out

Data from the Trade Ministry and central bank put the goods surplus at a record $62.8 billion, higher than the earlier June high of $47.9 billion. Exports were up 92.4% year over year to $130.7 billion, keeping the total above $100 billion for the fourth consecutive month. Information-technology shipments surged about 196%, non-IT exports rose 13.4%, and imports climbed 29.4%.

Markets, money, and policy

On the financial side, Korea's net external assets increased by $54.3 billion in September. Korean investors expanded direct investment overseas by $11.4 billion and increased their holdings of foreign securities by $16.6 billion, with purchases of overseas bonds hitting a record. Foreign funds, meanwhile, were net sellers of Korean equities by $13.7 billion, with large semiconductor names leading the outflows.

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Policywise, the Bank of Korea paused rate hikes in October after two consecutive increases. It has indicated growth should run considerably faster than earlier projections, leaving the door open to more tightening. The next rate decision is set for Nov. 26.

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