South Korea's Economy Grows 1.8% in Q1, Led by Semiconductor Exports

South Korea's economy grew 1.8% from the previous quarter in the first quarter of this year, boosted by an increase in semiconductor exports and a surge in facility investment. This preliminary figure for real Gross Domestic Product (GDP) growth, announced by the Bank of Korea on the 9th, was revised up by 0.1 percentage point from the previously announced advance estimate of 1.7%.

In the first quarter, exports increased by 5.9%, led by IT items such as semiconductors. Facility investment grew by 6.6%, driven by increases in machinery and transportation equipment. By industry, ICT manufacturing grew by 15.4%, leading the overall manufacturing sector's growth of 3.9%, while non-ICT manufacturing decreased by 0.9%.

National income also increased. Nominal Gross National Income (GNI) in the first quarter increased by 11.0% from the previous quarter, and real GNI increased by 9.2%. Per capita GNI for 2025 is projected to be $36,963, a 0.3% increase from the previous year, and 52.57 million won in Korean won terms, a 4.6% rise.

While the recovery in the semiconductor market leading to increased national income was positive, the widening growth gap between ICT and non-ICT sectors remains a challenge for balanced growth.