Korea’s current account surplus grew for the 20th consecutive month in September. With this trend set to continue, the nation is set to produce the largest-ever surplus in 2013. This should be welcomed, though with reservation.

The Korea Development Institute expects this year’s current account surplus will reach a record high of $69 billion. The Bank of Korea, which is more conservative in its estimation, says it will be around $63 billion.

Japan expects it will have a current surplus amounting to $60 billion this year. If so, Korea will be ahead of Japan for the first time. Undoubtedly, this should be pleasing to Koreans. Here again, however, they will do well to keep themselves from being overjoyed, given that a current account surplus has a downside as well.

On the upside, Korea’s huge surplus reflects a vote of confidence from foreign investors. The surplus has grown, partly because they have been increasing their equity and debt investments in Korea while withdrawing their investments from other emerging markets.

In addition, Korea’s creditworthiness is on the rise as it continues to produce current account surpluses, which will help Korea weather fluctuations in the international financial markets with greater ease. It needs to maintain a high level of creditworthiness because it does not want to knock at the door of the International Monetary Fund for help, as it did at the outbreak of the Asian financial meltdown.

Still, Korea cannot afford to welcome a rapidly growing surplus unreservedly. The reason is that it also reflects a slowdown in business activities.

Trade is a good example: Exports in the first nine months grew a meager 1.3 percent while imports declined 1.9 percent. Imports declined primarily because the prices of oil and other natural resources dropped.

More significantly, they fell also because the purchase of capital goods from abroad went down ― an indication that corporations were withholding investments. Indeed, the central bank says investments in facilities dropped 4.1 percent from August to September.

Also on the downside is mounting pressure on Korea to let its currency rise. In a recent report to the U.S. Congress, the U.S. Treasury Department said it was concerned about the Korean government intervening in the foreign exchange market to weaken the won.

Apparently in reply to the U.S. charges, Kim Choong-soo, governor of the central bank, said last week that Korea’s current account surplus grew, not because the won was undervalued against the dollar and other key currencies, but because Korean corporations withheld investments.

As evidence, he presented the current account deficits Korea sustained with the United States, Japan and the European Union. The surplus came from emerging markets.

No matter how persuasive Kim’s explanation proves to be in deflecting pressure on the won to appreciate, the government will have to give incentives to large business enterprises to spend more, instead of stashing away their export earnings.

Korea will have to strive not to follow the footsteps of Japan, whose economy stagnated although its annual average current account was posted at $130 billion in the 1991-2010 period. Instead, it will do well to heed advice from the International Monetary Fund, which has recently recommended that it boost domestic demand.