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SEOUL — South Korea's economy recorded its fastest quarterly expansion in five and a half years in the first quarter, according to preliminary data from the Bank of Korea (BOK) released Thursday. The country's real gross domestic product (GDP) rose 1.7 percent in the January-March period from the previous quarter, surpassing market expectations and nearly doubling the central bank's own forecast of 0.9 percent growth.

The figure marks the strongest quarterly growth since the third quarter of 2020, when the economy grew 2.2 percent, and signals a rebound from the 0.2 percent contraction recorded in the fourth quarter of 2025, according to the BOK data.

Coverage Comparison

Reports from Yonhap News, which carried the data, highlighted solid exports and resilient domestic demand as the main drivers of the expansion. The semiconductor upcycle was frequently cited as a key factor, though the degree of emphasis varied across reports. One version of the report described the growth as supported by "solid exports and resilient domestic demand," while another noted the role of the "semiconductor upcycle" specifically.

The reports also noted that the growth came despite the ongoing crisis in the Middle East, suggesting limited spillover effects on the economy during the period.

Key Claims

  • The South Korean economy expanded 1.7 percent in the first quarter of 2026 compared to the previous quarter, according to preliminary BOK data.
  • The latest figure marks the strongest quarterly growth since the third quarter of 2020, when the economy grew 2.2 percent.
  • Exports rose 5.1 percent from the previous quarter, the fastest growth since the third quarter of 2020, driven by strong global demand for semiconductors.
  • Private consumption increased 0.5 percent, while government spending rose 0.1 percent. Facility investment jumped 4.8 percent and construction investment grew 2.8 percent.
  • On a year-on-year basis, the economy expanded 3.6 percent in the first quarter, up from 1.6 percent in the previous quarter.
  • Real gross domestic income (GDI) rose 7.5 percent on the quarter, the highest level since the first quarter of 1988.
  • Lee Dong-won, director general of the BOK's economic statistics department, was quoted as saying that "robust exports and investment to expand chip production capacity, along with solid private consumption, drove overall growth." He added that "the semiconductor manufacturing sector accounted for nearly half of first-quarter GDP growth."

Perspectives

The strong GDP figures come amid broader positive signals in the economy. Reports noted that South Korea added 206,000 jobs in March, topping the 200,000 mark for the second straight month, according to data from the Ministry of Data and Statistics.

However, some reports indicated that the central bank's projection for annual growth was around 2 percent, suggesting that sustained momentum will be needed to meet that target.

The GDP data also arrives as President Lee Jae Myung has called for removing "unnecessary and outdated regulations" to promote new businesses, according to a separate Yonhap report. At an inaugural meeting of the presidential committee tasked with rationalizing regulations, Lee stressed the need to ensure global competitiveness, though no direct connection was drawn between these remarks and the GDP figures.

The semiconductor sector, which played an outsized role in the growth, was also the subject of positive corporate news, with SK hynix reporting record first-quarter profits on Thursday, driven by robust demand for high-bandwidth memory (HBM) and other memory segments.

The construction sector, which had contracted in the fourth quarter of 2025 due to a downturn, showed signs of recovery with 2.8 percent growth in investment. The BOK had previously flagged weakness in facility investment and construction as headwinds.

Economists will be watching whether the momentum can be sustained, particularly given the concentration of growth in the semiconductor sector and ongoing geopolitical uncertainties in the Middle East. The BOK's February outlook projected 2 percent growth for 2026, and Thursday's data will likely factor into future policy considerations.