S. Korean economy grows faster than expectations in Q2

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The South Korean economy expanded 0-point-7 percent on quarter in the second quarter of this year higher than previous projections.

Our correspondent Moon Ji-young reports.

South Korea's economy grew faster than earlier estimated in the second quarter, driven by robust exports and improved private consumption.

Preliminary data released by the Bank of Korea on Wednesday revealed that

the nation's real gross domestic product, a key economic indicator, grew by 0-point-7 percent quarter-on-quarter in the April to June period this year.

This revised figure marks an improvement of 0-point-1 percentage point from the advance estimate made in July.

The growth also represents a significant rebound from a contraction experienced in the first quarter.

Last week, the central bank upgraded its economic growth forecast for this year to 0-point-9 percent, up from its previous projection of 0-point-8 percent.

"If the economy grows around 0.6% on-quarter in the second half, we will be able to achieve 0.9% annual growth."

Breaking down the growth drivers,

private spending saw a 0-point-5 percent increase, largely due to higher spending on automobiles and health services.

Government expenditure also climbed 1-point-2 percent, boosted by increased healthcare benefits.

However, construction investment contracted, primarily driven by a decrease in civil engineering projects.

Facilities investment also declined due to reduced demand for ships and semiconductor manufacturing equipment.

In terms of trade, exports surged by 4-point-5 percent, spurred by strong global demand for semiconductors, and petroleum and chemical products.

Imports were also up by 4-point-2 percent.

"We expect domestic demand to continue its modest recovery, led by the government's supplementary budget execution and better consumer sentiment. However, while exports showed a favorable trend in July and August, we anticipate growth to gradually slow as the impact of U.S. tariff impositions expands."

Meanwhile, the country's gross national income saw a 2 percent increase, with real GNI growing by 1 percent.

This was largely due to improved terms of trade, which led to a reduction in real trade losses.

Moon Ji-young. Arirang News.