Real GDP Grew 0.6% in the Second Quarter
According to the "National Income for the Second Quarter of 2026 (Preliminary)" released by the Bank of Korea on the 8th, real gross domestic product (GDP, the total volume of a nation's production activity excluding price increases) rose 0.6% from the previous quarter and 3.7% from the same period a year earlier. This is in line with the advance estimate (the earliest provisional figure compiled) released in July, confirming the second-quarter growth momentum in the preliminary statistics.
"Operating profits in semiconductor manufacturing surged, and the earnings improvement is gradually spreading to industries beyond semiconductors, including chemical products, transport equipment manufacturing, and wholesale and retail services," said Kim Hwa-yong, head of the Bank of Korea's National Income Department. He added that if quarter-on-quarter growth averages 0.2–0.3% in the second half of the year, the central bank's projected annual growth of 3.3% is achievable.
Semiconductors led growth while construction faltered
Of the second quarter's 0.6% growth, the information and communications industry contributed 0.5 percentage points, accounting for the bulk of the overall growth. Manufacturing expanded 1.4% from the previous quarter, led by computers and electronic and optical equipment, while construction contracted 1.9% on a decline in civil engineering. Services grew 1.0%, driven by wholesale and retail trade, accommodation and food services, finance and insurance, and information and communications.
Consumption, investment, and trade moved in the same direction. Private consumption rose 0.4% as both goods and services spending increased, and government consumption also edged up 0.1% on higher health insurance benefit spending, lifting domestic demand. Facilities investment rose 0.2% on increased purchases of machinery such as semiconductor manufacturing equipment, while construction investment slipped 0.1%. Investment in intellectual property products, centered on research and development and software, jumped 3.4%, the largest gain among investment components. Exports grew 1.3%, led by semiconductors and machinery and equipment, while imports rose 0.7% on increases in automobiles and machinery and equipment.
Nominal indicators posted record highs. Nominal GDP grew 9.2% from the previous quarter and 26.4% from a year earlier, the highest since the third quarter of 1979 (27.7%) and a 47-year record, while gross operating surplus also surged 18.5% from the previous quarter, the steepest increase since the statistic was first published in 2010. The GDP deflator, which captures the gap between nominal and real figures, rose 21.9% from a year earlier, showing that prices contributed heavily to nominal growth.
Nominal gross national income (GNI) rose 8.8% from the previous quarter. Real GNI grew 3.1% as real trading gains expanded on improved terms of trade, outpacing real GDP growth of 0.6%, and was up 15.6% from a year earlier — the highest level since the fourth quarter of 1988 and a 38-year high. The gross savings rate came in at 45.6%, up 3.9 percentage points from the previous quarter, the highest since the statistic was first published in 1970.
"The rise in gross operating surplus driven by strong corporate earnings will translate into higher household income through performance-based pay and dividends, while also lifting government income from corporate, earned-income, and dividend taxes," Kim said, predicting that "this will lead to stronger domestic demand with a time lag." He added that if nominal GNI growth holds at current levels and exchange rate stability continues, the likelihood of per capita GNI exceeding $40,000 in U.S. dollar terms has grown substantially.
