In the second quarter of this year, South Korea’s current account surplus surpassed the combined surplus of "manufacturing powerhouses" Germany and Japan. According to the Economic Statistics System of the Bank of Korea (BOK) on the 25th, South Korea's surplus in the second quarter was tallied at $116.63 billion (approx. 154.3 trillion won), placing it second among 36 major countries with available data, trailing only China ($193.72 billion). Germany ranked third with $52.28 billion, and Japan fourth with $50.62 billion. This marks virtually the first time South Korea’s surplus has exceeded the combined total of Germany and Japan. According to the International Monetary Fund’s (IMF) October World Economic Outlook, the top five countries by projected surplus size for this year are China, South Korea, Germany, Taiwan, and Japan. Last year, the ranking was China, Germany, Japan, Taiwan, and South Korea.

The BOK projected in August that South Korea's surplus this year would reach $450 billion (approx. 600 trillion won). Furthermore, in an "Economic Situation Assessment" report released on the 22nd, the BOK stated that "the scale of the current account surplus will exceed initial forecasts," raising the possibility that it could approach $500 billion. South Korea’s record high annual surplus to date was $123.1 billion, set last year. This represents nearly a fourfold surge in surplus size within just a single year.

This unprecedented surge in the surplus is thanks to increased export volumes and soaring prices of semiconductors. In particular, memory semiconductors—South Korea’s flagship export product—have experienced significant price hikes driven by the global artificial intelligence (AI) investment boom that began late last year. The booming semiconductor exports have led to a sharp increase in the current account surplus, higher real and nominal growth rates, and increased tax revenues.

However, this is no time for unreserved celebration. Compared to the export boom, domestic demand—such as private consumption—remains sluggish. The government needs to actively implement policies so that the warmth of export-led growth spreads across households as a whole and strengthens the foundation for domestic demand.

At the same time, preparations must be made for the post-semiconductor super-cycle. Once AI investments peak, the semiconductor market is bound to experience a downturn. Moreover, the pursuit by Chinese semiconductor companies like Changxin Memory Technologies (CXMT) is fierce. The government and businesses must put their heads together to maintain a "super-gap" in semiconductor technology. Efforts to maintain the export competitiveness of industries other than semiconductors must also be pursued concurrently to alleviate "semiconductor concentration."

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