Lead

South Korea's economy grew 0.6 percent in the second quarter from the previous three months, according to advance data from the Bank of Korea (BOK) released Thursday. The expansion, driven by robust exports and a modest pickup in domestic demand, beat the central bank's earlier forecast of 0.2 percent growth, though it slowed from the first quarter's 1.8 percent expansion — the strongest quarterly growth since the third quarter of 2020.

From a year earlier, the economy grew 3.7 percent in the April-June period, slightly down from the first quarter's 3.8 percent, as reported by Yonhap News Agency.

Coverage Comparison

Two Yonhap News Agency reports covered the data release. The first focused on the headline growth figure, breaking down the contributions from various components. The second report adopted a more forward-looking angle, highlighting the possibility of another interest rate hike by the BOK and the economy's growth trajectory for the year.

Both reports noted that the second-quarter reading exceeded the BOK's May forecast of 0.2 percent growth. They also highlighted a sharp rise in real gross domestic income (GDI), which rose 15.6 percent on-year in the second quarter — the highest level since the first quarter of 1988, when it reached 16.4 percent.

The second report included analysis from Park Sang-hyun, an analyst at iM Securities Co., who said the quarterly data showed the economy maintained strong growth momentum despite the base effect from strong first-quarter growth and lingering Middle East concerns. Park noted that in the first quarter, exports accounted for most of GDP growth, but in the second quarter, domestic demand and net exports each contributed 0.3 percentage point to quarterly growth. He added that upbeat GDI, expected to grow faster than GDP for a while, would continue supporting investment and consumption.

Key Claims

  • The South Korean economy grew 0.6 percent in the second quarter from a quarter earlier, according to advance data from the Bank of Korea, as reported by Yonhap.
  • Real GDP rose 0.6 percent in the April-June period from three months earlier.
  • Exports rose 1.4 percent from the previous quarter, while imports increased 0.8 percent.
  • Private consumption added 0.5 percent.
  • Net exports contributed 0.3 percentage point to the quarterly GDP growth, and private consumption contributed 0.2 percentage point.
  • Government spending edged up 0.2 percent, and facility investment increased 0.2 percent on a quarterly basis.
  • Construction investment fell 0.2 percent.
  • Real gross domestic income (GDI) rose 15.6 percent on-year in the second quarter, marking the highest level since the first quarter of 1988.
  • Yonhap reported that second-quarter growth beat the BOK's earlier forecast of 0.2 percent made in May.
  • Yonhap said that the BOK expected Asia's fourth-largest economy to grow 3 percent in 2026 as long as it posts no worse than a 0.1 percent quarter-on-quarter contraction in both the third and fourth quarters.
  • Yonhap reported that the BOK projected the economy to grow 2.6 percent in 2026, and that the central bank expected to raise its growth forecast to some extent on stronger-than-expected chip-driven exports.
  • Yonhap also cited data showing South Korea's outbound shipments reached a record US$102.25 billion in June, up 70.9 percent from a year earlier, with semiconductor exports nearly tripling to a record $44.82 billion.

Perspectives

Bank of Korea (BOK)

The central bank's advance data showed second-quarter growth of 0.6 percent, exceeding its own May forecast of 0.2 percent. Yonhap reported that the BOK expected the economy to grow 3 percent in 2026 under the condition of no severe quarterly contraction, and that it projected the economy to grow 2.6 percent in 2026, with plans to raise the forecast due to strong chip-driven exports. The BOK also said that while the resurgence of Middle East tensions could place downward pressure on the economy through higher oil prices in the second half, growth could exceed 3 percent.

Market analysts

Park Sang-hyun, an analyst at iM Securities Co., said the second-quarter readings show the Korean economy maintained strong growth momentum despite the base effect and Middle East concerns. He highlighted balanced contributions from domestic demand and exports, and said upbeat GDI would continue supporting investment and consumption.