Key facts
- South Korea's economy grew 0.6% in the second quarter.
- The Q2 growth rate exceeded the median market estimate of 0.4%.
- Exports, particularly semiconductors, drove the growth.
- Private consumption increased by 0.5%, while construction investment fell by 0.2%.
- Year-on-year GDP growth was 3.7%.
South Korea's economy expanded by 0.6% in the second quarter, surpassing economists' expectations and driven by a semiconductor export boom. The Bank of Korea reported the advance estimate on Thursday, showing a deceleration from the 1.8% growth recorded in the first quarter. The overall growth was bolstered by a 1.4% increase in exports, particularly semiconductors, machinery, and equipment. Private consumption saw a modest increase of 0.5%, while government spending and facility investment also edged up. However, this was partially offset by a 0.2% decline in construction investment. On a year-on-year basis, GDP expanded by 3.7%, and real gross domestic income jumped 15.6% due to favorable terms of trade, largely driven by robust semiconductor exports offsetting rising energy prices.
The central bank projected the economy to grow 2.6% in 2026, but noted that stronger-than-expected chip-driven exports could lead to an upward revision of its forecast. South Korea's outbound shipments reached a record $102.25 billion in June, with semiconductor exports nearly tripling to $44.82 billion.