South Korea's travel account recorded a surplus for the third consecutive month in May 2025, as a sharp rise in inbound foreign visitors pushed travel income well ahead of outbound spending, according to data from the Korea Tourism Organization. The turnaround marks a decisive break from a prolonged slump that had kept the account in deficit for over six years.

Key Figures

The travel account posted a surplus of $220.5 million in May, a dramatic reversal from a deficit of $820.2 million recorded in the same month a year earlier. Travel income reached $2.58 billion, outpacing travel spending of $2.36 billion. On average, each foreign visitor spent $1,324 inside South Korea, while each South Korean travelling abroad spent $1,007 overseas.

What Broke the Deficit Streak

The May surplus follows consecutive surpluses in March ($263.8 million) and April, collectively snapping a 72-month streak of deficits that began in March 2020 — coinciding with the onset of the COVID-19 pandemic. The streak's end signals a structural shift in South Korea's post-pandemic travel economy rather than a one-off blip.

Foreign visitor arrivals totalled 1.95 million in May, up 19.4% from a year earlier. Meanwhile, the number of South Koreans travelling abroad fell 2.1% year-on-year to 2.34 million, contributing to the favourable balance.

Why Visitors Are Coming — and Koreans Staying Home

'Foreign visitor numbers have risen sharply in recent months, driven by the growing popularity of the Korean Wave and the weakening won,' said Kim Nam-jo, a professor of tourism at Hanyang University. 'At the same time, higher airfares stemming from the Middle East conflict have discouraged South Koreans from travelling abroad.'

The dual dynamic — a softer won making South Korea an attractive destination and elevated international airfares dampening outbound demand — has created conditions that analysts say could sustain the surplus through the summer travel season, though risks remain if the currency strengthens or geopolitical pressures ease.

Pension Funds Return to Local Equities

Separately, pension funds including the National Pension Service (NPS) — one of South Korea's largest institutional investors — turned net buyers of domestic equities in July for the first time this year, according to data from the Korea Exchange. The funds collectively purchased a net 68.4 billion won (approximately US$46.8 million) worth of shares on the Korea Composite Stock Price Index (KOSPI) through the first 24 days of July.

This marks their first month of net buying after six consecutive months of net selling. Over the first 17 trading sessions of July, pension funds were net buyers on 11 days and net sellers on six — a signal that institutional confidence in domestic markets may be recovering alongside the broader economic uptick.

What to Watch Next

Whether South Korea can extend the travel surplus into a fourth month will depend on sustained inbound momentum and continued restraint in outbound travel. Analysts will also watch whether the NPS's return to net buying marks a durable shift in institutional positioning or a tactical, short-term move tied to valuation corrections on the KOSPI.