The South Korean economy experienced a strong rebound at the beginning of the year, driven by export growth fueled by global demand for artificial intelligence technology.
The Bank of Korea reported on Thursday that gross domestic product (GDP) grew by 1.7% in the first quarter of this year compared to the previous quarter. This marks a reversal from the contraction seen in the fourth quarter of 2025 and represents the fastest growth rate since the third quarter of 2020.
This figure surpassed the median forecast of 0.9% from a Bloomberg survey and even exceeded the most optimistic predictions.
During the same period, semiconductor shipments surged by 139.1% year-on-year, which is more than three times the growth rate of the previous quarter. Furthermore, the overall pace of export growth each month reached levels not seen since 2021.
Despite this positive performance, the outlook for the economy, which has shown fluctuating growth momentum in recent quarters, still faces risks. Consumer confidence in March fell to a 10-month low, as the situation involving Iran has cast a shadow over the prospects for growth and prices.
In his inaugural speech on Tuesday, Bank of Korea Governor Shin Hyun-song stated that uncertainties surrounding the path of inflation and growth have increased significantly. He added that structural challenges should no longer be viewed merely as external constraints, as they are a key component of the "environment for policy operation."
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