The Bank of Korea (BOK) said on the 9th that nominal gross domestic product (GDP) in the first quarter grew 17.1% from a year earlier. It is the highest in more than 30 years since the third quarter of 1995 (19.2%), when semiconductors emerged as Korea's key export item. The rise stems from higher manufacturing wages centered on semiconductor export corporations such as Samsung Electronics and SK hynix.
◇ Workers' compensation growth rate hits highest since statistics were released
The Bank of Korea (BOK) released preliminary gross national income for the first quarter of 2026 on this day. The first-quarter nominal GDP growth rate rose 10.5% from the previous quarter. This is the highest since the first quarter of 1976 (13.0%), during the period of rapid economic growth. Employee compensation, a component, increased 4.0% from the previous quarter. The growth rate was the highest since the second quarter of 2010, when statistics began to be released. Total operating surplus excluding labor costs from corporations' profits rose 17%. This, too, is the highest growth rate on record.
Nominal gross national income (GNI) in the first quarter increased 11%, outpacing the nominal GDP growth rate. The GNI growth rate was also the highest since the first quarter of 1976 (12.7%), during the rapid growth period. Net factor income from abroad (income earned overseas by our nationals minus income earned domestically by foreigners) jumped from 9.2 trillion won to 13.7 trillion won.
◇ First-quarter real GDP revised up to 1.8% from 1.7%
Real GDP in the first quarter grew 1.8%. This is an improvement from the advance estimate (1.7%) the Bank of Korea (BOK) released on Apr. 23. It is the highest in five years and six months since the third quarter of 2020 (2.2%).
The Bank of Korea (BOK) said, "Reflecting some March actual data that could not be incorporated at the time of the advance estimate, indicators such as exports, facility investment, and private consumption improved." The export growth rate was revised up to 5.9% from the advance estimate of 5.1%, facility investment rose to 6.6% from 4.8%, and private consumption increased to 0.6% from 0.5%.
In contrast, construction investment fell to 1.4% from 2.8%, and government consumption turned to a decline, to -0.4% from 0.1%. It was noted that health insurance benefit expenditure decreased.
Real GNI increased 9.2%. It is the highest growth rate on record.
The GDP deflator, the value obtained by dividing nominal GDP by real GDP that indicates the price level of goods produced in Korea, rose 12.9% from a year earlier. The rate of increase is the highest in 45 years since the third quarter of 1981 (16%).
Meanwhile, the annual real economic growth rate last year was 1.1%, revised up from the advance estimate of 1.0% released in January. Growth slowed from 2024 (2.2%) and was the lowest since 2020 (-0.7%), when COVID-19 was at its peak. Nominal economic growth was tallied at 4.4%. This also declined from the previous year (6.5%) and is the lowest since 2023 (3.4%).