South Korean GDP grows 0.6% in Q2, boosted by chip exports

Seoul, July 23 – South Korea's economy expanded by 0.6% in the second quarter compared to the previous period, surpassing earlier expectations, primarily driven by robust exports of semiconductors. The Bank of Korea (BoK) reported these preliminary figures on Thursday. While this growth rate is a modest increase, it falls short of the 1.8% expansion recorded in the first quarter, which was the highest since the third quarter of 2020. The export sector, a key engine for the South Korean economy, saw a significant 1.4% rise, largely attributed to strong demand for technological products like semiconductors. Imports grew by 0.8%, mainly due to increased purchases of motor vehicles. Domestic demand also contributed to the economic uptick. Private consumption increased by 0.4%, fueled by higher spending on goods, including home appliances, and services such as dining and accommodation. Public consumption saw a smaller rise of 0.2%, primarily linked to healthcare expenditure. Investment figures showed a mixed picture. Investment in facilities grew by 0.2%, supported by increased purchases of machinery, particularly for semiconductor manufacturing. However, investment in construction experienced a slight decline of 0.2%, mainly due to a decrease in civil engineering projects. On an annual basis, South Korea's economy, the fourth largest in Asia, grew by 3.6% in the second quarter, a marginal decrease from the 3.8% growth registered in the first quarter. Despite global economic challenges, including geopolitical tensions, the BoK recently revised its annual growth forecast slightly upward to 2.6%, citing better-than-expected semiconductor exports.