The South Korean economy experienced its fastest growth in more than five years during the first quarter, driven by robust exports and strong domestic demand, as per data from the central bank. The real gross domestic product (GDP) increased by 1.8 percent from January to March, surpassing the earlier estimate by 0.1 percentage point.
This growth represents the most substantial quarterly expansion since the third quarter of 2020 when the economy grew by 2.3 percent. Year-on-year, the economy expanded by 3.8 percent in the first quarter, a significant rise from the 1.6 percent growth seen in the previous quarter.
The Bank of Korea attributed the upward revision of 0.1 percentage point in the first-quarter GDP to updated statistics related to facility investment and private consumption. This revision is expected to impact the annual growth forecast, which will be released in August, according to Kim Hwa-yong, director at the BOK.
Strong exports and solid domestic demand were key drivers of the economic growth in the first quarter, with exports increasing by 5.9 percent from the previous quarter, supported by high global demand for semiconductors, machinery, and automobiles. Facility investment saw a growth of 6.6 percent, the highest in four years, while construction investment rose by 1.4 percent.
Private consumption also saw a modest increase of 0.6 percent, although government spending declined by 0.4 percent. The BOK highlighted that domestic demand and net exports contributed significantly to the economic growth in the first quarter.
