Korea and Taiwan: How to Manage AI-Driven Super Surplus

A historic AI-driven export boom is projected to push South Korea and Taiwan to record current account surpluses by 2026, leading to anticipated currency appreciation and hawkish shifts in monetary policy.

Key Takeaways

• 1.The AI boom is driving record export surges in Korea and Taiwan, with AI-related exports potentially reaching ~30% of GDP in both economies by 2026.
• 2.Current account surpluses are projected to hit record highs: over 10% of GDP for Korea and over 20% for Taiwan, largely resilient even to energy price shocks.
• 3.Surplus recycling methods differ, with Korea investing in overseas equities and Taiwan building offshore FX deposits, though appreciation pressure on local currencies is mounting.

Table of Contents

• The AI Boom: The Strongest on Record
• Super Surplus in the Current Account
• Divergent Overseas Recycling
• Macro Implications
• Policy and Currency Outlook

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial