Seoul: South Korea's economy experienced a stronger-than-expected growth in the second quarter, fueled by robust exports and increased private consumption, as indicated by central bank data released on Wednesday.
According to Yonhap News Agency, the country's real gross domestic product (GDP), which serves as a key indicator of economic growth, rose by 0.7 percent in the April-June period compared to the previous quarter. This figure is 0.1 percentage point higher than the earlier forecast, based on preliminary data from the Bank of Korea (BOK).
"The revision came as some actual performance data from the final month of the quarter was incorporated, showing stronger-than-expected exports, construction investment, and intellectual property product investment, while facility investment was revised downward," the BOK stated.
The growth rate for the second quarter is the highest since the first quarter of 2024 when the GDP expanded by 1.2 percent. On a year-on-year basis, the economy grew by 0.6 percent in the second quarter, also 0.1 percentage point higher than the previous estimate.
The second-quarter growth represents a recovery from a 0.2 percent contraction in the first quarter, which was attributed to a domestic political crisis following former President Yoon Suk Yeol's declaration of martial law in December, along with uncertainties stemming from U.S. President Donald Trump's extensive tariff measures.
Private spending has shown signs of recovery as political instability eased, and exports surpassed expectations due to strong semiconductor shipments, according to the BOK. Exports increased by 4.5 percent from three months earlier in the second quarter, driven by global demand for semiconductors and petrochemical products.
Private spending rose by 0.5 percent in the second quarter, with increased expenditures on automobiles and cultural activities. Government spending increased by 1.2 percent during the same period. However, facility investment dropped by 2.1 percent, and construction investment decreased by 1.2 percent.
"Domestic demand is expected to continue its modest recovery led by the government's supplementary budget execution and better consumer sentiment," BOK official Kim Hwa-yong stated at a press briefing. "But the impact of the U.S.' tariffs is likely to grow further."
Last week, the BOK upgraded its economic growth outlook for the year to 0.9 percent from the previous forecast of 0.8 percent. "If the economy grows around 0.6 percent on-quarter in the second half, we will be able to achieve 0.9 percent annual growth," Kim added.
The country's gross national income (GNI) increased by 2 percent in the second quarter from three months earlier. Real GNI rose by 1 percent compared to the previous quarter as improved terms of trade led to a reduction in real trade losses, according to the BOK.