Advance estimates for South Korean GDP show the economy expanded at a stronger pace in the three months to June. GDP rose 0.6 percent on the quarter, up from an increase of 0.3 percent in the three months to March, with year-over-year growth steady at 0.9 percent. PMI surveys, in contrast, showed ongoing contraction in South Korea's manufacturing sector during the quarter, with monthly industrial production data showing volatile conditions.

The increase in headline GDP growth in the three months to June mainly reflects a smaller decline in investment spending and stronger net exports. Investment fell 0.1 percent in the three months to June after dropping 0.7 percent in the three months to March. Export growth weakened on the quarter, but this was outweighed by a bigger slowdown in imports. Offsetting these effects, private consumption expenditure weakened, falling 0.1 percent on the quarter after a previous increase of 0.6 percent.

At their most recent policy meeting earlier in the month, officials at the Bank of Korea left policy rates on hold at 3.50 percent for the fourth time in a row. This decision reflected officials' assessment that inflation is likely to stabilise around 3.0 percent for the rest of the year. Officials also argued that domestic growth has shown signs of picking up from recent weakness and expressed optimism that private consumption and exports will strengthen in coming months. They continue to forecast that South Korea's economy will grow 1.4 percent in 2023.

Second-quarter GDP is expected to rise a quarterly 0.5 percent and rise 0.9 percent on the year. The former would be an improvement from 0.3 percent and the latter would match the first quarter's rates.

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.