South Korea GDP Rises 0.6% in Q2 on Semiconductor-Led Export Jump

South Korea’s economy returned to expansion in the second quarter, with real gross domestic product rising a seasonally adjusted 0.6% from the prior three months, Bank of Korea advance data showed on Thursday. The rebound follows a 0.2% contraction in the first quarter and exceeds the 0.5% increase projected by economists, marking the fastest quarterly growth since early 2024 and allowing Asia’s fourth-largest economy to sidestep a technical recession. Exports surged 4.2%—the strongest performance since 2020—thanks largely to robust semiconductor demand, while private consumption climbed 0.5% as political uncertainty eased after June’s snap presidential election. Government spending added 1.2%. Those gains offset continued weakness in investment, with construction and facility spending each slipping 1.5%. On an annual basis, GDP grew 0.5%. The central bank said net exports and domestic demand each contributed 0.3 percentage point to growth and noted that U.S. “reciprocal” tariffs, currently paused until 1 August, had only a limited impact during the quarter. The Bank of Korea still expects the economy to expand 0.8% in 2025 but warned that higher U.S. levies could slow momentum in the second half.