(ATTN: RECASTS headline, lead with more details; ADDS comments, details in paras 6, 11-13, additional photo)
SEOUL, April 23 (Yonhap) — Despite the ongoing crisis in the Middle East, the South Korean economy posted its fastest quarterly growth in 5 1/2 years in the first quarter, supported by solid exports amid a semiconductor upcycle and resilient domestic demand, central bank data showed Thursday.
The country’s real gross domestic product (GDP) — a key measure of economic growth — rose 1.7 percent in the January-March period from three months earlier, according to the preliminary data from the Bank of Korea (BOK).
It marked the strongest quarterly growth since the third quarter of 2020, when the economy expanded 2.2 percent. The figure was also nearly twice the BOK’s forecast of 0.9 percent growth.
Asia’s fourth-largest economy contracted by 0.2 percent in the first quarter of 2025 before recovering with growth of 0.7 percent and 1.3 percent in the following quarters. But it backtracked in the fourth quarter, declining 0.2 percent amid weak facility investment and a downturn in the construction sector.
Overall, the economy expanded 1 percent in 2025.
Containers are stacked at a port in the city of Pyeongtaek, south of Seoul, in this file photo from April 1, 2026. (Yonhap)
“Robust exports and investment to expand chip production capacity, along with solid private consumption, drove overall growth,” Lee Dong-won, director general of the BOK’s economic statistics department, told a press briefing. “The semiconductor manufacturing sector accounted for nearly half of first-quarter GDP growth.”
Exports rose 5.1 percent in the January-March period from the previous quarter on the back of strong global demand for semiconductors, marking the fastest growth since the third quarter of 2020.
Private consumption added 0.5 percent, while government spending edged up 0.1 percent. Facility investment increased 4.8 percent on a quarterly basis, and construction investment grew 2.8 percent.
On an on-year basis, the economy expanded 3.6 percent in the first quarter, up from the 1.6 percent growth in the previous quarter, the data showed.
Real gross domestic income (GDI) rose 7.5 percent on-quarter in the first quarter, marking the highest level since the first quarter of 1988, when it reached 8 percent.
“The impact of the Middle East conflict was limited through the first quarter, as shipments that had passed through the Strait of Hormuz continued to arrive in Korea until late March,” Lee said. “But its effects are expected to begin emerging in April, though uncertainties remain high over relevant circumstances.”
During a ministerial special task force meeting on inflation, Finance Minister Koo Yun-cheol said government policies to revitalize capital markets and support consumption, such as a fuel price cap scheme, also contributed to the sharp rebound in first-quarter growth.
“As peace talks in the Middle East are being delayed and uncertainty remains high until the conflict ends, the government will stay alert and make every effort to ensure macroeconomic stability and ease the burden on households,” Koo added.
In its latest outlook published in February, the BOK had projected the economy to grow 2 percent in 2026. But the central bank said last week that growth momentum has weakened and that this year’s growth is likely to come in below its earlier forecast due to the prolonged conflict in the Middle East.
This photo, taken April 22, 2026, shows a gas station in Seoul.
graceoh@yna.co.kr
(END)
