Driven by strong global demand for artificial intelligence technology, which has boosted exports, South Korea's economy experienced a robust rebound at the beginning of the year. Data released by the Bank of Korea on Thursday showed that the country's gross domestic product (GDP) grew by 1.7% in the first quarter compared to the previous quarter. This figure marks a reversal from the economic contraction seen in the fourth quarter of 2025 and represents the fastest growth rate since the third quarter of 2020. The data significantly exceeded the median market expectation of 0.9% derived from media surveys and was even higher than the most optimistic forecasts. According to the data, semiconductor export shipments surged by 139.1% year-on-year during the period, more than doubling the growth rate of the previous quarter. The monthly growth rate for overall shipments reached levels not seen since 2021. Private consumption increased by 0.5% compared to the previous quarter, up from a 0.3% rise in the prior quarter. Government spending growth slowed to 0.1%. Construction investment and facility investment rose by 2.8% and 4.8% quarter-on-quarter, respectively. Despite the notable economic recovery, growth has been volatile over recent quarters, and the future economy still faces numerous uncertainty risks. Pressured by the situation in the Middle East involving Iran, the prospects for economic growth and inflation are under strain, with South Korea's consumer confidence index falling to a near 10-month low in March.
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