South Korea's real gross domestic product (GDP) grew by 0.6% in the second quarter, significantly exceeding expectations and continuing the growth trend established in the first quarter. This growth was bolstered by strong semiconductor exports.
According to the Bank of Korea on July 23, the preliminary GDP growth rate for the second quarter increased by 0.6% compared to the previous quarter, far surpassing the forecast of 0.2%.
Breaking down the second quarter growth by sector, private consumption rose by 0.4%, driven by increases in both goods (such as electronics) and services (including food and accommodation). Government consumption also saw a 0.2% increase, primarily due to spending on health insurance benefits.
However, construction investment declined by 0.2% due to a decrease in civil engineering projects, while facility investment rose by 0.2%, supported by increased spending on machinery, particularly for semiconductor manufacturing.
Exports increased by 1.4%, led by semiconductors, machinery, and equipment, while imports rose by 0.8%, driven by automobiles and machinery.
In terms of contributions to the second quarter growth rate, net exports contributed 0.3 percentage points, a significant drop from 1.1 percentage points in the previous quarter. Domestic consumption contributed 0.3 percentage points, while private consumption added 0.2 percentage points. Both construction and facility investments recorded a contribution of 0.0 percentage points.
By economic activity, agriculture, forestry, and fisheries saw a sharp decline of 7.1%, primarily in cultivation and fishing. The manufacturing sector grew by 1.2%, driven by increases in computers, electronics, optical instruments, and machinery.
The electricity, gas, and water supply sector decreased by 1.3%, mainly due to declines in water supply and raw material recycling. The construction sector also fell by 1.9% due to a decrease in civil engineering projects. In contrast, the service sector grew by 1.1%, supported by retail, accommodation, food services, finance, insurance, and information and communication.
Real gross domestic income (GDI) rose by 3.6%, significantly outpacing the real GDP growth rate of 0.6%. Compared to the same period last year, GDI increased by 15.6%, marking the largest growth since the first quarter of 1988, which saw a 16.4% increase.
* This article has been translated by AI.
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