Containers are stacked at a port in the city of Pyeongtaek, south of Seoul, April 1. Yonhap
Despite the ongoing crisis in the Middle East, the Korean economy posted its fastest quarterly growth in 5 1/2 years in the first quarter, supported by solid exports amid a semiconductor upcycle and resilient domestic demand, central bank data showed Thursday.
The country's real gross domestic product (GDP) — a key measure of economic growth — rose 1.7 percent in the January-March period from three months earlier, according to the preliminary data from the Bank of Korea (BOK).
It marked the strongest quarterly growth since the third quarter of 2020, when the economy expanded 2.2 percent. The figure was also nearly twice the BOK's forecast of 0.9 percent growth.
Asia's fourth-largest economy contracted by 0.2 percent in the first quarter of 2025 before recovering with growth of 0.7 percent and 1.3 percent in the following quarters. But it backtracked in the fourth quarter, declining 0.2 percent amid weak facility investment and a downturn in the construction sector.
Overall, the economy expanded 1 percent in 2025.
"Robust exports and investment to expand chip production capacity, along with solid private consumption, drove overall growth," Lee Dong-won, director general of the BOK's economic statistics department, told a press briefing. "The semiconductor manufacturing sector accounted for nearly half of first-quarter GDP growth."
Exports rose 5.1 percent in the January-March period from the previous quarter on the back of strong global demand for semiconductors, marking the fastest growth since the third quarter of 2020.
Private consumption added 0.5 percent, while government spending edged up 0.1 percent. Facility investment increased 4.8 percent on a quarterly basis, and construction investment grew 2.8 percent.
On an on-year basis, the economy expanded 3.6 percent in the first quarter, up from the 1.6 percent growth in the previous quarter, the data showed.
Source: Korea Times News
