South Korea’s Q2 Growth Accelerates on Semiconductor Export Surge

South Korea’s real GDP grew 0.6 % in the April-June quarter, beating the Reuters median forecast of 0.4 % and the Bank of Korea’s 0.2 % projection. Year-on-year growth was 3.7 %, slightly above the 3.5 % median estimate. The gain was driven by a 1.4 % rise in exports—led by semiconductors, machinery and equipment—offsetting a 0.2 % decline in construction investment. Private consumption added 0.4 % and government consumption 0.2 %.

Reuters

Manufacturing output rose 1.2 % and services 1.1 %. Investment in intellectual-property products surged 3.3 %, the strongest increase since early 2012.

Korea’s economy grows 0.6% in Q2 as chip exports offset Middle East headwinds

A National Assembly Budget Office report noted that manufacturing accounted for 27 % of real GDP in 2025, the highest share in a decade, with the semiconductor-focused computer, electronics and optical equipment sector contributing 37.4 % of total manufacturing value added. “Rising semiconductor prices are increasing value added, and Korea is heavily dependent on the semiconductor industry,” said Yang Jun-sok, professor of economics at The Catholic University of Korea.

Manufacturing tops 27% of Korea’s GDP as chip dependence deepens Korea’s economy grows 0.6% in Q2 as chip exports offset Middle East headwinds CNBC TV18Reuters

Analysts expect at least one more rate increase before year-end, with a minority forecasting a decision at the BOK board meeting on August 27. The central bank will also revise its 2024 growth outlook in August, after raising the projection to 2.6 % in May.

CNBC TV18

• BOK Governor Shin Hyun-song (July 16): policymakers will stay hawkish while inflation exceeds target and growth remains robust.

CNBC TV18

• Unnamed BOK official (July 23): a quarterly growth rate above –0.1 % could enable annual growth of 3 %.

Reuters

• Economists’ survey (July 23): anticipate another rate move before October, with some pointing to the August 27 board meeting.

CNBC TV18

Reuters and MK sources agree on the 0.6 % QoQ GDP increase and the 3.7 % YoY figure. No substantive disagreement on core numbers is evident.

Korea’s economy grows 0.6% in Q2 as chip exports offset Middle East headwinds

• “Rising semiconductor prices are increasing value added, and Korea is heavily dependent on the semiconductor industry,” — Yang Jun-sok, professor of economics at The Catholic University of Korea

Manufacturing tops 27% of Korea’s GDP as chip dependence deepens

The BOK is expected to revise its 2024 growth outlook in August and may raise the policy rate again before October, potentially at the August 27 board meeting. Continued strength in semiconductor exports will be a key factor in shaping both the economic outlook and monetary-policy decisions.

CNBC TV18