Seoul: The South Korean economy recorded a growth of 0.6 percent in the second quarter, supported by a recovery in private consumption and strong exports, as indicated by central bank data released on Thursday. The real gross domestic product (GDP) of South Korea, a critical indicator of economic performance, rose by 0.6 percent during the April-June period compared to the previous quarter, based on preliminary figures from the Bank of Korea (BOK).
According to Yonhap News Agency, this growth surpassed market expectations of a 0.5 percent increase. The economy's rebound followed an unexpected 0.2 percent contraction in the first quarter, marking the first decline since the second quarter of 2024. This earlier downturn was attributed to a domestic political crisis triggered by former President Yoon Suk Yeol's declaration of martial law and uncertainties from U.S. President Donald Trump's comprehensive tariff measures, which negatively affected consumer spending and export growth.
Year-on-year, the economy expanded by 0.5 percent in the second quarter, in contrast to the stagnation observed in the first three months of the year. The expansion was largely driven by rising exports and increasing domestic demand. Exports rose by 4.2 percent from the previous quarter, driven by strong global demand for semiconductors and petrochemical products. Private spending increased by 0.5 percent, with notable expenditures on automobiles and cultural activities. Meanwhile, government spending rose by 1.2 percent.
However, facility investment and construction investment both saw declines of 1.5 percent. The BOK reported that net exports and domestic demand each contributed 0.3 percentage points to the economic growth observed in the second quarter. Despite the growth, the BOK forecasts the South Korean economy will grow by 0.8 percent this year, amidst weak consumption and slowing export growth due to uncertainties related to Washington's tariff measures. In 2024, South Korea, Asia's fourth-largest economy, experienced a growth rate of 2 percent.