Seoul: South Korea's nominal gross domestic product (GDP) has grown at an unprecedented pace in the second quarter, marking the fastest increase in 47 years, largely fueled by robust exports and investments in artificial intelligence (AI), according to central bank data released Tuesday. The Bank of Korea (BOK) reported that the country's real GDP rose by 0.6 percent in the April-June period compared to the previous quarter.
According to Yonhap News Agency, this growth aligns with the BOK's earlier estimates, although there have been slight revisions. The bank adjusted growth in construction investment and intellectual property investment upward by 0.1 percentage point each, while government consumption growth was reduced by the same margin. The latest figures reflect a positive trend following a contraction of 0.1 percent in the last quarter of the previous year, with a subsequent rebound of 1.8 percent in the first quarter.
On an annual basis, South Korea's economy expanded by 3.7 percent in the second quarter, continuing the momentum from a 3.8 percent growth in the first quarter. The export sector, a critical component of this growth, saw a 1.3 percent increase from the previous quarter, driven by strong global demand for semiconductors, machinery, and equipment. Although this represents a deceleration from a 5.9 percent increase in the first quarter, it remains a key factor in the overall economic performance.
Investment in facilities experienced a modest growth of 0.2 percent, while intellectual property investment surged by 3.4 percent. Conversely, construction investment slightly declined by 0.1 percent. Private consumption increased by 0.4 percent, and government expenditure saw a marginal rise of 0.1 percent.
In terms of nominal GDP, the country recorded a 9.2 percent increase from the previous quarter and a significant 26.4 percent rise compared to the same period last year. This marks the most substantial growth since the third quarter of 1979, when the economy experienced a 27.7 percent on-year surge. The central bank's data further indicated that per capita gross national income (GNI) increased by 8.8 percent quarter-on-quarter and 26.4 percent year-on-year.
Real GNI also showed considerable growth, rising 3.1 percent from the previous quarter and 15.6 percent from a year earlier, the highest since the fourth quarter of 1988. The ongoing positive trend has led the central bank to revise its 2026 growth projection upward to 3.3 percent, attributing this to strong exports, particularly in the semiconductor sector, which continues to experience a super cycle.