Despite the ongoing crisis in the Middle East, the South Korean economy experienced its fastest quarterly growth in 5.5 years in the first quarter. The country’s real gross domestic product (GDP) increased by 1.7% from the previous quarter, supported by robust exports and resilient domestic demand.
This growth marked the strongest quarterly performance since 2020, exceeding the Bank of Korea’s forecast. The expansion was primarily driven by strong exports, particularly in the semiconductor sector, and solid private consumption.
Exports surged by 5.1% in the January-March period, fueled by global demand for semiconductors. Additionally, private consumption and investment in chip production capacity contributed significantly to the overall growth. The economy expanded by 3.6% year-on-year in the first quarter.
Real gross domestic income (GDI) also saw a notable increase of 7.5% in the first quarter, reaching its highest level since 1988. Despite concerns about the impact of the Middle East conflict, the economy remained resilient in the face of uncertainties.
Finance Minister Koo Yun-cheol highlighted government policies aimed at supporting capital markets and consumption, which played a role in the strong rebound of first-quarter growth. As uncertainties persist due to delays in peace talks in the Middle East, the government remains vigilant to ensure macroeconomic stability and ease the burden on households.
