| Consensus | Consensus Range | Actual | Previous | |
| Quarter over Quarter | 0.6% | 0.6% to 0.6% | 0.6% | 0.6% |
| Year over Year | 3.7% | 3.7% to 3.7% | 3.7% | 3.7% |
Highlights
Revised estimates for South Korean GDP show the economy grew 0.6 percent on the quarter in the three months to June, matching the advance estimate and confirming growth slowed sharply from the 1.8 percent increase recorded in the three months to March. GDP rose 3.7 percent on the year in the three months to June, also matching the advance estimate of a 0.3 percent decline and down slightly from the 1.8 percent increase recorded previously.
At the Bank of Korea's most recent policy meeting, held late last month, officials increased the main policy rate from 2.75 percent to 3.0 percent. Officials also indicated that they expect this policy stability to continue over the next six months. They also advised that they expect GDP growth will be 3.3 percent in 2026 and 2.9 percent in 2027, up from the previous forecasts of 2.6 percent and 2.1 percent respectively, largely reflecting the impact of strong AI-related growth in exports and investment.
Market Consensus Before Announcement
Second quarter GDP growth rates are expected unrevised at 0.6 percent on quarter and 3.7 percent on year.
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.