Asia's Current Account Divide: How the AI Boom Is Swelling Surpluses in Taiwan and South Korea While Oil and Chip Imports Push Thailand, the Philippines and Others Toward Deficits, and What It Means for India

The current account, which tracks a country's trade in goods and services plus income and transfers, is the clearest scorecard of who is winning the AI boom in Asia. North Asia, home to the chips and memory behind AI servers, is running record surpluses. Parts of Southeast Asia are importing the equipment and the oil that the boom requires, and their current accounts are weakening.

This article explains the data country by country, covering Taiwan, South Korea, Thailand, Malaysia, Vietnam, the Philippines and Indonesia, and the three forces behind the divide: semiconductor exports, the oil shock and thin buffers. It also covers the Goldman Sachs super surplus forecast, trade deficits, the rupee and what India's current account deficit says about its position. All figures are from central banks, government releases and published research, so recheck them before using them.

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The Current Account Divide in Numbers

Economy	Latest current account	Direction
Taiwan	Q2 2026 surplus of $58.49 billion; Q1 $62.54 billion; record $69.94 billion in Q4 2025	Near record surplus
South Korea	June surplus of $49.73 billion, a record; May $38.61 billion	Record surplus
Thailand	Q2 deficit of $17.7 billion, first in eight quarters, about 12% of GDP by one estimate	Deficit
Malaysia	Surplus fell to 2% of GDP from 3% despite a record goods surplus	Weaker surplus
Vietnam	Trade deficit of $20.5 billion over seven months	Trade deficit
Philippines	Deficit expected to widen toward 4% of GDP through 2027	Widening deficit
Indonesia	Trade balance slipped into deficit for the first time since 2020	Weaker
India	Q1 FY27 deficit of $4.2 billion, 0.5% of GDP	Wider deficit

The pattern is clear. The two largest chip and memory exporters are accumulating surpluses at record pace, while most economies with weaker links to the AI supply chain are running deficits.

Taiwan and South Korea: The AI-Driven Super Surplus

Taiwan's current account surplus in Q2 was the third highest ever, trailing only Q4 2025 and Q1 2026. The central bank said the surplus reflects robust demand for AI-related technology, and Taiwanese firms are also investing abroad, with direct investment outflows above $10 billion for a second straight quarter.

South Korea's June surplus of $49.73 billion beat May's record of $38.61 billion, driven by semiconductor exports. Goldman Sachs calls the result an AI-driven super surplus, forecasting above 10% of GDP for Korea and above 20% for Taiwan in 2026, with AI-related exports near 30% of GDP in both. It expects both currencies to face appreciation pressure.

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Southeast Asia: Imports, Oil and Weaker Current Accounts

Southeast Asia gets some AI lift, but it arrives as imports first. Thailand's imports of data-centre equipment pushed its goods trade into deficit, and even excluding oil the trade balance is in deficit for the first time since 1998. Bank of Thailand research shows that 1% of tech exporters, mostly foreign firms, account for 85% of its tech exports, so the gains are narrow.

Higher oil prices worsen the picture. With the Strait of Hormuz disrupted, Brent above $100 has strained the trade balances of oil importers such as Thailand, the Philippines and Indonesia. Malaysia's current account surplus weakened to 2% of GDP from 3% even though its goods surplus hit a record, which surprised analysts.

Three Forces Behind the Current Account Split

Force	North Asia	Southeast Asia and India
AI and chips	Exporters of logic, memory and networking chips	Importers of servers and data-centre equipment
Energy shock	Dependent on oil but with large surpluses as a buffer	Fewer buffers, so oil hits trade balances and currencies
Fiscal and external buffers	Stronger fiscal positions and reserves	Thinner buffers, more reliance on capital inflows

Nomura's Asia economist points to exactly these three drivers: exposure to the energy shock, fiscal positions and the AI boom. Economist Danny Quah describes Southeast Asia's gain as a sugar rush from supporting, not leading-edge, chips and from power and resources for data centres.

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What the Current Account Divide Means for Markets

Equities: Taiwan and South Korea have reached repeated record highs, while stocks in India, Indonesia and the Philippines have lagged.

Currencies: Large surpluses support the won and the Taiwan dollar, while deficits pressure the baht, rupee and peso.

Policy: Surplus economies may face pressure to raise rates, and deficit economies may tighten to defend currencies.

Flows: Foreign money tends to follow the current account, which is why India has seen portfolio outflows.

India's Current Account Position

India metric	Figure
Q1 FY27 current account deficit	$4.2 billion, 0.5% of GDP, against $3.4 billion a year earlier
Merchandise trade deficit	$86.1 billion against $68.9 billion
Net services receipts	$51.6 billion against $47.9 billion
Portfolio investment outflows	$9.6 billion
Overall balance of payments	Deficit of $8.1 billion
FY27 deficit projection	0.8% to 1.2% of GDP, against 0.6% in FY26

India's deficit is far from the 4.8% of GDP crisis level of FY13, and services and remittances cushion it. But the rupee near 96, Brent above $100 and portfolio outflows show the same energy sensitivity as Southeast Asia. CareEdge projects $90 billion to $95 billion of FCNR deposit inflows in FY27 to finance the gap, which links the current account directly to the bank deposit numbers seen this week.

Risks to the AI-Driven Current Account Picture

Positioning unwind: A fall in AI capital spending would hit North Asian surpluses fast.

Hormuz: A reopening of the strait would cut oil prices and repair the import side for Southeast Asia and India.

Concentration: A few firms, like one in Thailand's AI supply chain, drive much of the gains.

Currency swings: Appreciation in Korea and Taiwan could narrow surpluses over time.

What to Watch Next on the Current Account

1. Korea and Taiwan monthly and quarterly current account releases.
2. Thailand's Q3 external accounts and the baht.
3. Brent crude and any progress on Strait of Hormuz shipping.
4. India's Q2 FY27 current account data, due in December.
5. AI capital spending guidance from US hyperscalers and Nvidia.

Conclusion

The AI boom is splitting Asia's current account: Taiwan and South Korea are posting record surpluses, while Thailand, the Philippines, Vietnam and Indonesia face widening deficits, and India's deficit widened to $4.2 billion. Oil and equipment imports explain much of the gap, and thin buffers make the south more vulnerable. For India, the current account and the rupee depend on Brent and capital inflows. Consult a SEBI-registered advisor before making any decision.

Frequently Asked Questions

What is a current account?

Ans. The current account records a country's trade in goods and services, income from abroad and transfers such as remittances. A surplus means it earns more from the world than it spends.

Why are Taiwan and South Korea running record current account surpluses?

Ans. Booming exports of AI chips and memory, which Goldman Sachs says could lift the surplus above 10% of GDP in Korea and above 20% in Taiwan in 2026.

Why is Thailand's current account in deficit?

Ans. Thailand imported heavily for data-centre builds and paid more for oil, which pushed its Q2 deficit to $17.7 billion, the first in eight quarters.

How is Southeast Asia's current account hurt by the AI boom?

Ans. Many economies import servers and equipment before exports follow, and high oil prices add pressure. Gains also concentrate in a few foreign firms.

What is India's current account deficit?

Ans. India's deficit was $4.2 billion, or 0.5% of GDP, in Q1 FY27, and economists project 0.8% to 1.2% of GDP for the full year.

How does the current account affect the rupee?

Ans. A wider deficit needs more foreign capital to fund it. When outflows rise, as with $9.6 billion of portfolio outflows in Q1, the rupee weakens.

Could the current account divide reverse?

Ans. It could if the Strait of Hormuz reopens and oil falls, or if AI spending slows and hits North Asian exports.

Does the current account divide matter for Indian investors?

Ans. This article does not constitute investment advice. It affects the rupee, foreign flows and sector performance. Consult a SEBI-registered financial advisor before investing.