Advance estimates for South Korean GDP show the economy rebounded in the three months to March after it had contracted in the three months to December. GDP rose 0.3 percent on the quarter after falling 0.4 percent previously, matching the consensus forecast, while year-over-year growth moderated from 1.3 percent to 0.8 percent, below the consensus forecast of 1.0 percent. PMI surveys, in contrast, showed ongoing contraction in South Korea's manufacturing sector over the course of the quarter.

The recovery in headline GDP growth in the three months to March was driven by consumer spending and exports. Private consumption expenditure rose 0.5 percent on the quarter after a decline of 0.6 percent in the three months to December, while exports rebounded very sharply, up 3.8 percent after dropping 4.6 percent previously. Imports also recovered on the quarter. Growth in both investment spending and government consumption expenditure, in contrast, weakened in the three months to March.

At their most recent policy meeting earlier in the month, officials at the Bank of Korea left policy rates on hold. Officials noted that weaker global growth and tighter monetary policy will likely weigh on South Korea's economy in the first half of 2023 but continue to expect some improvement later in the year as conditions in China recover. They also expect inflation to moderate over 2023.

First-quarter GDP is expected to rise a quarterly 0.3 percent and rise 1.0 percent on the year.

GDP data are a comprehensive measure of South Korea’s overall production and consumption of goods and services. GDP serves as one of the primary measures of overall economic well-being. GDP calculates the total market value of goods and services produced in South Korea within a given period after deducting the cost of goods and services used up in the process of production. Therefore, GDP excludes intermediate goods and services and considers final aggregates only.

Gross domestic product (GDP) can be measured using three approaches, namely the production, income and expenditure approaches. The production measure of GDP is derived from firm level data and estimates the value added by all producing industries in the South Korea economy. The income measure of GDP is derived from earnings data and estimates how the income earned from these producing industries is then distributed throughout the economy as returns to labor, capital and government. The expenditure measure of GDP is derived from data estimating spending on goods and services by final end users and includes consumption, investment and exports minus the value of imports.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.