The Finance Ministry announced that the possibility of achieving an annual economic growth rate of 3% has increased, as the second quarter economic indicators exceeded market expectations. The ministry noted that considering the increase in real gross national income (GNI) due to improved trade conditions, the likelihood of reaching a per capita GNI of $40,000 has also grown.
On July 23, the ministry stated that despite the high growth base from the previous quarter and the impact of the Middle East conflict, robust growth continued, supported by strong semiconductor exports and domestic recovery driven by government policies.
According to the Bank of Korea, the real GDP growth rate for the second quarter was recorded at 0.6% compared to the previous quarter, significantly higher than the forecast of 0.2% made in May. After a rebound from -0.1% in the fourth quarter of last year to 1.8% in the first quarter of this year, the economy continued to grow in the second quarter.
The ministry explained that the increase in exports due to the semiconductor boom and the rise in foreign tourist numbers have driven the growth, while government policies such as supplementary budgets and price controls have also contributed to a solid domestic economy.
It added that the significant increase in real GNI has improved corporate investment capacity and household purchasing power, and this improvement in income conditions is expected to support domestic recovery in the second half of the year.
However, the ministry identified geopolitical tensions in the Middle East and U.S. tariff policies as major downside risks for the economy in the latter half of the year.
The ministry emphasized that the government will closely monitor external risks while implementing key policy tasks for the economic growth strategy in the second half to maintain growth momentum. It will also maintain an emergency response system for the Middle East and focus on stabilizing livelihoods by supporting vulnerable groups affected by rising prices, exchange rates, and interest rates, as well as expanding job opportunities for youth.
* This article has been translated by AI.
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