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South Korea’s Economy Posts Fastest Quarterly Growth Since 2020 on Chip Export Boom

Reliance on volatile external demand leaves the rebound exposed to energy shocks.

Overview

  • Growth accelerated after Thursday’s Bank of Korea report showed GDP up 1.7% from the prior quarter and 3.6% from a year earlier.
  • The chip upswing showed up in trade and earnings as exports rose 5.1% on the quarter and SK hynix reported record profit on AI memory demand.
  • Facility investment climbed 4.8% and construction rose 2.8%, reversing earlier weakness.
  • Private consumption increased 0.5% and government spending 0.1%, signaling only a modest domestic pickup.
  • The surge in real gross domestic income, up 7.5% and the biggest since 1988, boosts purchasing power but could be tested by energy supply risks from the Middle East.