Boy band BTS performs in Gwanghwamun, central Seoul, on March 21. [JOINT PRESS CORPS]
Did BTS truly save the economy? Korea’s travel account posted a surplus in March for the first time in more than 11 years, boosted by a BTS performance and the peak spring travel season.
According to the Bank of Korea (BOK), the country’s current account surplus reached $37.33 billion in March. The figure surpassed the previous monthly high of $23.19 billion in February, breaking a record set just one month earlier.
The goods account surplus also reached a record high on the back of strong semiconductor exports, while the current account remained in the black for the 35th consecutive month, marking the second-longest streak since the 2000s. The current account measures the net amount a country earns through trade in goods and services with other countries, indicating the strength of its foreign currency earnings.
Exports of goods remained the primary driver of the surplus. The goods account — which subtracts imports from exports — posted a record surplus of $35.07 billion.
Exports climbed 56.9 percent from a year earlier to $94.32 billion, widening the goods account surplus. Strong exports of IT products such as semiconductors and computer peripherals led the gains. Exports of non-IT products also increased due to higher petroleum product prices and an increase in working days compared to the previous month.
Imports in March also rose 17.4 percent from a year earlier, driven mainly by chemical products including raw materials for semiconductors and secondary batteries. However, imports totaled $59.24 billion, far below exports. The surge in global oil prices caused by the war was not fully reflected in March import figures because many shipments had been contracted at prewar prices due to transportation time lags.
The travel account also showed notable improvement. Korea posted a $140 million surplus in the travel account in March, marking the first surplus since November 2014, when the surplus reached $50 million. That ended a streak of 136 consecutive months in deficit.
The travel account had remained chronically in deficit earlier this year, recording deficits of $1.26 billion in January and $1.74 billion in February, as spending by Koreans traveling abroad continued to outpace spending by foreign tourists visiting Korea.
In March, however, the so-called K-culture effect, including a BTS performance, helped push the travel account back into surplus.
According to the Justice Ministry, the number of foreign visitors entering Korea in March reached 2.11 million, up 40.4 percent from the previous month and 26.5 percent from a year earlier. It marked the first time monthly foreign arrivals exceeded 2 million since related statistics began.
One risk going forward is that prolonged conflict in the Middle East could reduce global travel demand as airfares rise.
BTS members perform at Gwanghwamun Square in central Seoul on March 21, following the release of the band's fifth full-length album, "Arirang." [YONHAP]
“Foreign tourists have continued to increase in places like Myeong-dong recently, so at this point the travel account surplus does not appear to be a one-off phenomenon,” said Kim Young-hwan, director-general of the BOK's economic statistics department. “But we still need to monitor future trends.”
Meanwhile, the services account — which includes the travel account and other business services — recorded a deficit of $1.29 billion due to increased payments for business services such as research and development.
Beginning in April, the effects of the Iran war are expected to weigh more heavily on the current account. Korea’s crude oil import price averaged $75.4 per barrel in March but surged 45 percent to $112.3 in April.
Even if prices continue to rise sharply, however, disruptions to logistics through the Strait of Hormuz could reduce import volumes, limiting the increase in total import costs. Rising international oil prices are also boosting export prices for domestic petroleum products, partially offsetting higher import costs.
“So far, the impact of the [Iran] war has not outweighed the strong momentum in semiconductor exports,” Kim said. “But if rising energy prices continue over the long term, they will place downward pressure on the annual current account.”
Net financial account assets — assets minus liabilities — increased by $36.99 billion in March.
Foreign investment in Korean stocks posted a record net outflow of $29.33 billion, affected by Middle East geopolitical risks and weakening memory chip demand. Korean investment in overseas stocks increased by $3.94 billion, although net purchases declined from the previous month as U.S. stock markets underwent a correction.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
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