Korea‘s GDP grows 1.3% in Q1: BOK

[Photo by Yonhap]

South Korea’s economy grew more than 1 percent in the first quarter, driven by strong exports and construction investment.

The country‘s real gross domestic product (GDP) growth rate for the first quarter was estimated at 1.3 percent from the previous quarter, according to the Bank of Korea on Thursday. This is the highest quarterly growth rate in two years and three months since the fourth quarter of 2021, when the figure was 1.4 percent.

A sharp decline in exports led to a setback in the fourth quarter of 2022 with a figure of negative 0.3 percent, but the quarterly growth rate recovered to a positive 0.3 percent in the first quarter of 2023 and maintained the trend for a fifth consecutive quarter with the rate 0.6 percent in the second quarter of that year, 0.6 percent in the third quarter and 0.6 percent in the fourth quarter.

By sector, construction investment showed a significant increase of 2.7 percent in the first quarter of 2024, mainly attributable to the simultaneous recovery of building and civil engineering.

Exports also grew by 0.9 percent, driven mainly by information and technology goods such as mobile phones. Private consumption also increased by 0.8 percent, with growth in goods such as clothing and services as well as food and accommodation. Government consumption also increased by 0.7 percent, mainly in the form of spending on goods.

[Graphics by Song Ji-yoon]

On the other hand, investments in equipment fell by 0.8 percent due to stagnation in transport equipment, while imports also fell by 0.7 percent, mainly due to electrical equipment.

The largest contributors to the growth rate in the first quarter were private investment and net exports, both of which added 0.6 percentage points to the growth rate in the first quarter of 2024. Private consumption and government consumption also contributed to growth with 0.4 percentage points and 0.1 percentage points respectively, but government investment contributed negatively to the growth rate by 0.1 percentage point.

In terms of industry, construction recorded the highest growth rate at 4.8 percent, followed by electricity, gas and water supply at 1.8 percent.

Manufacturing, with a focus on chemical products and transport equipment, also grew by 1.2 percent while services grew by 0.7 percent, mainly driven by wholesale and retail trade and hotels and restaurants. But agriculture, forestry, and fishing fell by 3.1 percent due to a decline in crop production.

The real gross domestic income (GDI) growth rate for the first quarter was 2.5 percent, and was higher than the real GDP growth rate.