Investment income earned overseas hits a record high at $29.4bn

Investment income balance accounts for 30% of the current account

Dividend and interest income received overseas by companies and individuals up 24% in a year

Shifting away from reliance on goods exports toward an advanced-economy-style structure

Dividend and interest income earned by South Korean companies and citizens through overseas investments swelled to a record high last year. In the past, the country relied solely on goods exports to earn dollars, but analysts now say the economy is shifting toward an advanced-economy-style structure in which overseas investment assets also generate substantial foreign currency inflows.

According to South Korea’s balance of payments data for November 2025 released by the Bank of Korea (BOK) on Jan. 9, the cumulative investment income balance for January–November last year totaled $29.4068bn. In just 11 months, it surpassed the previous record of $28.5655bn set in 2024. That is 24% higher than the same period a year earlier ($23.6953bn). Given that investment income continued to rise in December, the full-year surplus likely exceeded $30bn.

The investment income balance is calculated by subtracting the amount foreign residents receive in dividends and interest in Korea from the dividends and interest Korean residents receive from overseas investments. Compared with the goods balance, which reflects income from selling products, it is sometimes described as “money making money.” In 2015, the investment income balance accounted for just 4.6% of the current account, but last year that share rose to 28.9%. The balance of direct investment income—income earned by companies from overseas subsidiaries and the like—posted a surplus of $13.4483bn, up 7.5% from a year earlier. The portfolio investment income balance stemming from stock and bond investments by individuals and pension funds recorded a surplus of $7.5776bn, setting a new all-time high.

The goods balance, where Korea has traditionally been strong, also posted a large surplus on the back of the semiconductor boom. The goods balance for January–November came to a surplus of $107.0219bn, 6.9% higher than the $100.1269bn surplus for all of 2024. While the services balance deficit widened, the increase in both the goods balance and the primary income balance suggests last year’s current account surplus likely exceeded $115bn. That would be roughly $10bn above the previous record set in 2015 ($105.1bn).

Song Jae-chang, head of the BOK’s Financial Statistics Department, said: “With both the goods balance and the primary income balance rising, Korea is transitioning to an advanced-economy-style external balance structure that earns dollars through investment as well as through exports, which has been its traditional strength. Even if exports wobble, investment income will serve as a buffer.”

▶Investment income balance

The amount obtained by subtracting the income foreign residents receive in Korea from dividends and interest earned by domestic residents through overseas investments. Adding the “compensation of employees balance” yields the primary income balance.

Kang Jin-kyu, reporter josep@hankyung.com