Editorial: Second-Quarter Growth Hits a 47-Year High, Time to Rein In Inflation

South Korea’s nominal gross domestic product grew 26.4% from a year earlier in the second quarter, marking the biggest increase in 47 years. The last comparable growth rate came in the third quarter of 1979.

Nominal GDP multiplies the market prices of all final goods and services produced within a country. The editorial presents the latest figure as evidence that the Korean economy has expanded at an extraordinary pace over a short period.

Semiconductors played the leading role. The global artificial intelligence boom has driven a powerful semiconductor cycle, lifting the prices of Korea’s main exports in overseas markets. The export deflator, which measures changes in export prices, jumped 56.6%, led by semiconductors.

Higher corporate profits pushed the growth rate of total operating surplus to its highest level since 2010. Real gross national income also increased 15.6% from a year earlier, its largest rise in 37 years and six months.

But the editorial says there are substantial reasons for concern and warns against raising a premature toast. Its headline calls for tighter management of prices as the economy absorbs the effects of this exceptionally strong nominal growth.