Seoul:<Text>

Despite the ongoing crisis in the Middle East, the South Korean economy posted its fastest quarterly growth in 5 1/2 years in the first quarter, supported by solid exports and resilient domestic demand, central bank data showed Thursday. The country's real gross domestic product (GDP) -- a key measure of economic growth -- rose 1.7 percent in the January-March period from three months earlier, according to the preliminary data from the Bank of Korea (BOK).

According to Yonhap News Agency, this growth marked the strongest quarterly performance since the third quarter of 2020, when the economy expanded 2.2 percent. The figure significantly surpassed the BOK's forecast of 0.9 percent growth. Previously, Asia's fourth-largest economy had contracted by 0.2 percent in the first quarter of 2025 before recovering with growth of 0.7 percent and 1.3 percent in the subsequent quarters, only to decline again by 0.2 percent in the fourth quarter due to weak facility investment and a downturn in the construction sector.

Overall, the economy expanded 1 percent in 2025. In detail, exports rose 5.1 percent from the previous quarter, driven by strong global demand for semiconductors, marking the fastest growth since the third quarter of 2020. Private consumption increased by 0.5 percent, while government spending saw a slight rise of 0.1 percent. Facility investment grew 4.8 percent on a quarterly basis, and construction investment grew 2.8 percent.

On an annual basis, the economy expanded 3.6 percent in the first quarter, up from the 1.6 percent growth in the previous quarter, the data indicated. Real gross domestic income (GDI) rose 7.5 percent on-quarter in the first quarter, marking the highest level since the first quarter of 1988, when it reached 8 percent.

In its latest outlook published in February, the BOK had projected the economy to grow 2 percent in 2026. However, the central bank noted last week that the growth momentum has weakened and that this year's growth is likely to fall below its earlier forecast due to the conflict in the Middle East.