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 since the third quarter of 2020 (2.3%) in 5 years and 6 months, and projected that the second quarter would be limited to 0.2% growth due to base effects. But exports, which grew 5.9% in the first quarter, rose another 1.4% in the second quarter, driving GDP growth.
That day, the Bank of Korea (BOK) said in the "Advance estimate of real gross domestic product for the second quarter" 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%).
By contrast, private consumption grew 0.4%, a slowdown in the growth rate from 0.6% in the first quarter. Construction investment, which rose 1.4% in the first quarter, turned down 0.2% in the second quarter, and facility investment saw its growth rate slow from 6.6% to 0.2%.
By industry, manufacturing grew 3.9% in the first quarter and 1.2% in the second quarter, extending its expansion. The service sector growth rate widened from 0.6% to 1.1%.
With GDP posting a "surprise" in both the first and second quarters, the odds have risen that this year's economic growth rate will exceed the Bank of Korea (BOK)'s forecast of 2.6%. Shin Hyun-song, governor of the Bank of Korea, said at a press conference on the 16th after raising the base rate to 3.75% from 3.5% annually, "This year's growth rate is expected to significantly exceed the forecast of 2.6%." The Ministry of Economy and Finance raised its growth forecast for this year to 3% from 2% in the economic growth strategy for the second half released on the 14th.