South Korea's economy continued to grow in the second quarter of this year, driven by strong semiconductor exports.
The Bank of Korea reported on September 8 that the real gross domestic product (GDP) growth rate for the second quarter was 0.6%, matching the preliminary estimate.
After experiencing a contraction of 0.2% in the first quarter of last year, the quarterly growth improved to 0.6% in the second quarter, followed by 1.4% in the third quarter, before declining again to -0.1% in the fourth quarter. This year, the economy has rebounded sharply.
In the second quarter, notable increases in exports and private consumption were observed. Exports rose by 1.3%, primarily driven by semiconductors, machinery, and equipment. Imports also increased by 0.7%, fueled by higher imports of automobiles and machinery.
Construction investment decreased by 0.1% due to a decline in civil engineering projects, while facility investment grew by 0.2%, supported by increased spending on machinery, including semiconductor manufacturing equipment. Investment in intellectual property products surged by 3.4%, driven by growth in research and development and software.
Private consumption increased by 0.4%, bolstered by higher spending on goods such as home appliances and services like food and accommodation. Government consumption also rose by 0.1%, primarily due to increased health insurance benefit expenditures.
Compared to the preliminary estimates, the growth rates for construction investment and intellectual property product investment were each revised upward by 0.1 percentage points, while government consumption was adjusted downward by 0.1 percentage points.
Nominal GDP for the second quarter increased by 9.2% compared to the previous quarter. Year-on-year, it rose by 26.4%, marking the highest growth rate since the third quarter of 1979, which recorded a 27.7% increase.
In the second quarter, nominal gross national income (GNI) grew by 8.8% compared to the previous quarter. Although nominal net income from abroad decreased from 137 trillion won to 120 trillion won, the growth in nominal GDP (9.2%) contributed to the overall increase.
Real GNI increased by 3.1% compared to the previous quarter. Despite a decline in real net income from abroad from 116 trillion won to 79 trillion won, improvements in trade conditions led to a significant rise in real trade profits, which surged from 38.7 trillion won to 58.5 trillion won, exceeding the GDP growth rate of 0.6%.
The overall savings rate reached 45.6%, up 3.9 percentage points from the previous quarter, marking the highest level since statistics were first published in 1970.
* This article has been translated by AI.
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