Korea’s First Outperformance over Japan in its Annual Current Account Surplus

South Korea’s cumulative current account surplus scale this year is forecast to surpass that of Japan for the first time in its trade history since 1948, the year of Korea’s founding as a Republic. According to data released both by the Bank of Korea (BOK)and Japan’s Finance Ministry, S. Korea’s cumulative current account surplus from January to August this year was $US422.2 billion, outperforming by US$7 billion the Japanese results, which recorded US$415.3 billion for the same period.

On a year-to-date basis, Korea’s such remarkable outperformance record in the current account surplus over Japan is the first since 1980 when related statistical aggregation is launched. On an annual basis, the cumulative annual current account surplus of Korea outperformed that of Japan (US$601 billion) recording US$630 billion.

So far, Korea’s scale of current account surplus was an extremely low level over that of Japan. As a good example, in a financial crisis year of 2008, Japan has had recorded whopping US$159.36 billion current account surplus, while that of Korea was US$32 billion, a level of nearly 1/50 of Japan’s.

But, from last year, Korea’s comparative current account surplus gap against Japan was significantly decreased since the latter recorded its lowest level in its history of US$604 billion. Critically, Japan’s current account surplus scale in 2010 was nearly halved into US$119,060million in the next year from the scale of US$203.92 billion. During the same period, while, Korea has maintained a steady upward trend in its current account surplus – US$29.39 billion in 2010, US$26.07 billion in 2011, and US$43.14 billion in 2012.

By Kim Min-su : Here