July trade surplus of $42 billion ranks second all time… Exports exceed $100 billion for two consecutive months

July current account balance recorded the second-largest surplus on record as exports continued to perform strongly, centered on semiconductors. Merchandise exports exceeded $100 billion for two consecutive months.

According to the Bank of Korea's "Preliminary International Balance of Payments for July 2026," released on the 4th, July's current account balance was recorded at a surplus of $42.08 billion. While the surplus narrowed compared to the previous month's record high of $49.73 billion, it remains the second-largest in history and the largest for any July on record.

The current account balance posted a surplus for 39 consecutive months. Cumulative current account balance from January to July this year reached a surplus of $233.09 billion.

The merchandise trade balance recorded a surplus of $40.43 billion, exceeding $40 billion for two consecutive months following the previous month's $47.89 billion surplus. Like the current account balance, this marks the second-largest in history and the largest for any July on record.

Merchandise exports totaled $100.45 billion, a 65.3% increase from the same period last year. Although down from $112.37 billion due to base effects from export concentration at the end of the previous quarter, exports exceeded $100 billion for two consecutive months. Merchandise imports rose 21.7% to $60.02 billion.

Customs-based exports reached $98.96 billion, a 63.0% increase from the same period last year. IT product exports surged 140.6%, driving overall growth. By item, computer peripherals and SSDs (+344.5%), semiconductors (+176.3%), and wireless communication devices (+51.2%) saw significant increases.

Non-IT product exports also rose 18.3%. Increases were recorded in petroleum products (+35.7%), chemicals (+19.1%), steel products (+11.3%), machinery and precision instruments (+8.4%), and passenger cars (+8.4%).

By region, exports increased across most areas: China (+96.2%), Southeast Asia (+74.7%), the United States (+69.1%), the European Union (EU) (+55.6%), Latin America (+25.7%), and Japan (+10.9%). Exports to the Middle East also turned positive, rising 24.7% after a decline in the previous month.

Customs-based imports totaled $68.57 billion, up 26.5% from the same period last year. While raw materials and capital goods continued to rise, consumer goods declined for the first time in 15 months.

The services balance recorded a deficit of $1.97 billion, widening from the previous month's deficit of $1.29 billion. The travel balance turned into a deficit of $340 million for the first time in three months due to increased outbound travelers influenced by peak overseas travel season and the designation of Constitution Day as a public holiday.

Other business services recorded a deficit of $770 million, processing services a deficit of 60 billion won, and income from intellectual property rights usage a deficit of $540 million. In contrast, communications, computer, and information services turned from a $80 million deficit in the previous month to a $200 million surplus.

Primary income balance posted a surplus of $4.35 billion, widening from the previous month's $3.27 billion surplus. This was driven by expanded operating profits of overseas sales subsidiaries of semiconductor companies, leading to increased direct investment dividend income. Dividend income balance recorded a surplus of $3.83 billion.

Net financial account assets increased by $40.32 billion. While smaller than the previous month's record high increase of $46.71 billion, it remains the second-largest in history. In direct investment, domestic investors' overseas investments rose by $3.36 billion, while foreign investors' domestic investments declined by $780 million.

In securities investment, domestic investors' overseas investments increased by $13.57 billion. Equity investments rose by $12.33 billion, centered on general government and non-financial corporations, while debt security investments turned positive with a $1.24 billion increase as overseas bonds became more attractive.

Foreign investors' domestic securities investment increased by $8.17 billion. Equity investments rose by $5.98 billion amid eased selling pressure on domestic stocks and factors such as SK Hynix's issuance of American Depositary Receipts (ADRs). Bond investments saw a narrowed increase due to reduced arbitrage incentives but still rose by $2.19 billion.