| Consensus | Consensus Range | Actual | Previous | |
| Quarter over Quarter | 1.7% | 1.7% to 1.7% | 1.8% | 1.7% |
| Year over Year | 3.6% | 3.6% to 3.6% | 3.8% | 3.6% |
Highlights
The South Korean economy rebounded 1.8% on quarter in the January-March as strong global demand for semiconductors amid the artificial intelligence boom pushed up exports and capital investment lifted domestic demand. It is 0.1 percentage point above the advance estimate. The Q1 growth follows a slight 0.1% contraction in October-December and a 1.4% rise in July-September.
Last month the Bank of Korea revised up its Korean GDP outlook for 2026 sharply to 2.6% from its February projection of 2.0%, noting that the robust
semiconductor cycle is set to lead the growth despite the drag from the Middle East conflict.
On the production side, manufacturing rose 3.9% on quarter in the first quarter vs. -0.6% in the previous quarter, led by higher output of computer, electronic and optical products. Among expenditure categories, private consumption gained 0.6% on clothing and finance after rising 0.4% in Q4 while government spending fell 0.4% on health care benefits following a 1.0% rise in the final quarter of 2025.
Exports increased 5.9% (vs. -1.1% in Q4), reflecting solid demand for semiconductors. Imports were up on 3.9% (vs. -0.2% in Q4) on machinery and equipment as well as vehicles.
From a year earlier, the Korean GDP grew 3.8% in Q1, also revised up from the initial estimate of 3.6% and much faster than the 1.6% increase seen in Q4.
Market Consensus Before Announcement
The consensus sees GDP growth at 1.7 percent on quarter and 3.6 percent on year, unchanged from the last report.
Definition
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.
Description
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.