Advance estimates for South Korean GDP show the economy grew at a solid pace in the three months to June, rebounding from contraction at the start of the year. GDP rose 0.6 percent on the quarter after falling 0.1 percent previously, with year-over-year growth picking up from a fall of 0.1 percent to an increase of 0.5 percent. PMI surveys showed contraction in the manufacturing sector over this period, largely reeling the impact of the escalation in global trade tensions since the start of April.

At their most recent policy meeting earlier this month, officials at the Bank of Korea left policy rates on hold at 2.50 percent. The statement accompanying the decision showed that officials were reluctant to ease policy further because of concerns about house price growth in the Seoul area and higher household debt. Measures introduced by the South Korean government to slow the property market appear to have has some initial effect, but officials argued that it is appropriate to give these measures more time to operate before lowering policy rates again. Although they reiterated that they have a rate cut stance, officials concluded that it is necessary to adjust the timing and pace of any further rate cuts until the impact of the government's property market measures are clearer.

Growth seen up 0.4 percent on the quarter after a decline of 0.2 percent in Q1.

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.