Preliminary data shows that South Korea's real GDP growth rate for the first quarter of 2026 was 1.8%, exceeding initial estimates. The per capita gross national income (GNI) increased by 9.2% compared to the previous quarter.
According to statistics released by the Bank of Korea on June 5, the real GDP for the first quarter grew by 1.8% from the previous quarter.
By sector, manufacturing rose by 3.9%, driven by increases in computers, electronics, and optical equipment. The construction sector grew by 2.2%, supported by gains in both building and civil engineering. The services sector saw a 0.6% increase, primarily in retail, accommodation, food services, finance, and insurance.
In terms of expenditure, private consumption increased by 0.6%, while government consumption decreased by 0.4%. Construction investment and facility investment rose by 1.4% and 6.6%, respectively. Exports, particularly in IT products like semiconductors, surged by 5.9%, while imports increased by 3.9% due to higher demand for machinery, equipment, and automobiles.
The GDP deflator rose by 12.9% compared to the same period last year. The GDP deflator is a macroeconomic indicator that reflects the overall price level, calculated by dividing nominal GDP by real GDP, including exports and imports.
In the first quarter of this year, real GNI surged by 9.2% compared to the previous quarter. The Bank of Korea explained that "improved trade conditions and an increase in real net income from abroad (from 8.2 trillion won to 11.6 trillion won) significantly contributed to the real GDP growth rate of 1.8%."
Per capita GNI is an indicator of the average standard of living in a country. It is calculated by adding nominal GNI, which reflects growth rates adjusted for nominal prices, to nominal net income from abroad, and then dividing by the population estimated by the National Statistical Office. However, since it is converted to U.S. dollars, it may decrease if the exchange rate rises.
Additionally, last year's per capita GNI was recorded at $36,963, marking a 0.3% increase from the previous year. South Korea's per capita GNI first surpassed $30,000 in 2014 ($30,798) and peaked at $35,494 in 2018, but saw declines in 2019 ($34,094) and 2020 ($33,929).
In 2021, the per capita GNI rebounded to $37,898 as the economy recovered from the COVID-19 impact and the value of the won increased. However, in 2022, it fell again to $35,229 due to a sharp depreciation of the won, resulting in a decline in dollar-denominated per capita GNI.
In 2023, the figure rose to $36,194, avoiding a second consecutive year of decline, but still falling short of the record high of $37,898 in 2021.
Last year's GDP deflator increased by 3.2% compared to the previous year. The annual real GDP growth rate for last year was recorded at 1.1%, despite a widening decline in construction investment and a slowdown in export growth, thanks to increased private and government consumption and expanded facility investment.
* This article has been translated by AI.
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