South Korea's September current account surplus exceeds US$60 billion for the first time, with semiconductor exports as the main engine

South Korea's September current account surplus jumped to a record high, driven by booming semiconductor exports. Global AI investment continues to boost demand for Korean tech products. Data released by the Bank of Korea on Thursday showed that the September current account surplus widened to US$61.5 billion from US$46.1 billion in August. The Bank of Korea said the figure exceeded the previous record of US$49.7 billion set in June and marked the first time a monthly current account surplus has surpassed US$60 billion. The record highlights the South Korean economy's growing reliance on the global AI boom: surging demand for advanced memory chips is driving exports and fueling economic growth. The strength in exports has provided a buffer against weakness in other parts of the economy, although questions remain about how long the unprecedented pace of AI spending can last. Those doubts intensified further after the Democratic Party swept the U.S. midterm elections. The Democratic victory raised the possibility of stricter scrutiny of data center projects and could slow the pace of AI buildouts. The data showed that South Korea's September goods trade surplus also reached a record high of US$62.8 billion, exceeding the previous peak of US$47.9 billion in June. Exports rose 92.4% year on year to US$130.7 billion, surpassing US$100 billion for the fourth consecutive month. Among them, exports of information technology products surged about 196%, while non-IT exports grew 13.4%. Imports rose 29.4%. The financial account showed a net increase in assets of US$54.3 billion. South Koreans' direct investment overseas increased by US$11.4 billion, and securities holdings increased by US$16.6 billion. Meanwhile, foreign investors net sold US$13.7 billion of South Korean stocks, mainly involving large semiconductor shares; South Korean investors' purchases of overseas bonds hit a record high. After two consecutive rate hikes, the Bank of Korea paused its tightening cycle in October, with policymakers weighing stronger-than-expected economic growth against persistent inflationary pressure. The Bank of Korea has signaled that economic growth may be significantly faster than previously expected, leaving open the possibility of further policy tightening. The Bank of Korea's next rate decision meeting is scheduled for November 26.