Gross domestic product (GDP) grew 0.6% in the second quarter from the previous quarter, the Bank of Korea (BOK) said on the 23rd. Earlier, the Bank of Korea (BOK) said first-quarter GDP grew 1.8%, the highest in 5 years and 6 months since the third quarter of 2020 (2.3%), and predicted that second-quarter growth would be limited to 0.2% due to a base effect. But exports, which grew 5.9% in the first quarter, also rose 1.4% in the second quarter, driving GDP growth.
The Bank of Korea (BOK) said in the "second-quarter real gross domestic product (advance estimate)" released that second-quarter GDP growth was 0.6%. Exports, led by semiconductors and machinery and equipment, grew 1.4% from the previous quarter, driving GDP growth. Government consumption, which fell 0.4% in the first quarter, rose 0.2% in the second quarter. Investment in intellectual property products, including research and development, increased 3.3%, with the growth rate the highest in 14 years and 3 months since the first quarter of 2012 (5.4%).
In contrast, private consumption grew 0.4%, with the growth rate slowing from the first quarter (0.6%). Construction investment, which rose 1.4% in the first quarter, turned to a 0.2% decline in the second quarter, and facilities investment saw its growth rate slow from 6.6% to 0.2%.
By industry, manufacturing increased 3.9% in the first quarter and 1.2% in the second quarter, extending its growth trend. The service sector growth rate expanded from 0.6% to 1.1%.
With GDP posting a "surprise" in both the first and second quarters, the likelihood has risen that this year's economic growth rate will exceed the Bank of Korea (BOK) outlook of 2.6%. Shin Hyun-song, governor of the Bank of Korea, raised the benchmark interest rate to 3.75% from 3.5% on the 16th and said at a press conference, "This year's growth rate is expected to exceed the 2.6% outlook by a large margin." The Ministry of Economy and Finance raised its growth outlook for this year to 3% from 2% in its economic growth strategy for the second half released on the 14th.