Q1 GDP Rises 1.7%, Driven by Semiconductor Exports

South Korea's economy grew 1.7% in the first quarter compared to the previous quarter, propelled by an increase in semiconductor exports. This marks the highest quarterly growth rate recorded in approximately five years and six months, since the third quarter of 2020. According to the Bank of Korea, this growth is considered an outcome exceeding expectations amid the unstable situation in the Middle East.

GDP growth was primarily driven by a 5.1% increase in IT product exports, particularly semiconductors. Construction investment (2.8%) and facility investment (4.8%) also turned positive, contributing to the growth. Semiconductor manufacturing accounted for approximately 55% of the Q1 GDP increase. Stronger-than-expected first-quarter earnings from major semiconductor companies emerged as a key factor boosting the overall growth rate.

In the first quarter, real gross domestic income (GDI) increased by 7.5% from the previous quarter, reaching its highest point since the first quarter of 1988.