Spending and exports drive real GDP up 0.6%: BOK

The South Korean economy expanded at point-6 percent in the April to June period from the previous quarter, rebounding from the point-2 percent contraction in the first quarter.

Our Kim Do-yeon has more.

South Korea's real gross domestic product, a key indicator of the economy, grew by 0-point-6 percent on-quarter in the second quarter of the year.

That's according to the Bank of Korea's preliminary data on Thursday.

This is a bounce back as in the first quarter, the nation's real GDP contracted by 0-point-2 percent on-quarter with the previous two quarters also showing stagnant growth.

On top of this, the quarter two number exceeded market expectations of a 0-point-5 percent gain.

"This second quarter GDP can be summed up as strong growth driven largely by the private sector — particularly exports and consumption."

Specifically, private consumption rose 0-point-5 percent, while government spending increased 1-point-2 percent.

And, although still on a downward trend, the rate of decline for construction and facility investment both stood at negative 1-point-5 percent.

The BOK zoomed in on the increased spending and that it has been gradually getting better, especially with more spending on entertainment.

"We're seeing a gradual improvement. Conditions in May were better than in April, and June was even better than May. In terms of services, ticket sales for performances, for example, saw a significant jump. Restaurant demand and spending, which had been sluggish, also showed signs of recovery."

Meanwhile, both exports and imports saw gains.

In the second quarter, exports rose 4.2 percent from the previous quarter, driven by strong global demand for semiconductors and petrochemical products.

Imports were also up by 3.8 percent.

The Bank of Korea noted that improved petrochemical exports were partly due to reduced refining capacity in the U.S. and Europe, which increased demand for Korean petroleum products.

Pharmaceutical and cosmetics exports remained strong as well, aided by expanded U.S. and EU import approvals and continued global interest in K-beauty.

Officials say some of the recent surge came from pre-tariff demand ahead of looming trade measures, though the actual impact of tariffs has yet to fully materialize.

Kim Do-yeon, Arirang News.