Q2 GDP Grows 0.6%… SME Exports Break $60 Billion Mark in First Half

The economy grew 0.6% in the second quarter compared to the previous quarter, driven by semiconductor exports and a recovery in domestic demand. The Bank of Korea announced on the 25th that the preliminary estimate for Gross Domestic Product (GDP, the market value of goods and services produced within a country in a year) increased by 0.6% quarter-on-quarter. This growth was attributed to robust exports and the recovery of private consumption, with exports and domestic demand contributing 0.3 percentage points each to the growth. Lee Dong-won, head of the Economic Statistics Department 2 at the Bank of Korea, cited the continued boom in the semiconductor sector and the fact that the impact of the Middle East conflict was not significant as key factors behind the growth.

In particular, domestic demand increased, aided by events such as Samsung Electronics' home appliance coupon refund campaigns. The Bank of Korea estimated that consumption in the home appliance sector alone reached at least 3 trillion won.

While real GDP grew 3.7% compared to the second quarter of last year, real Gross Domestic Income (GDI) surged by 15.6%.

According to the Ministry of SMEs and Startups, exports by small and medium-sized enterprises (SMEs) in the first half of this year rose 11.6% year-on-year to $64 billion, marking an all-time high. This is the first time exports have surpassed the $60 billion mark in the first half of the year.

Meanwhile, if the average growth rate for the third and fourth quarters remains above -0.1%, the annual growth rate will reach 3%. There are also projections that the Bank of Korea will raise the benchmark interest rate further in August.