South Korea's Economic Recovery in Q2

After a challenging first quarter, South Korea's economy showed signs of recovery with a 0.6% growth in GDP during the second quarter of 2025, according to preliminary data released by the Bank of Korea on July 24.

Domestic demand and exports were the key drivers behind this positive turnaround. Private consumption saw a 0.5% increase, supported by durable goods and services, while government consumption rose by 1.2%, thanks to expanded health insurance benefits.

Challenges in Investment Sectors

Despite the overall growth, not all areas flourished. Construction and facilities investments experienced declines of 1.5% each, highlighting ongoing challenges in these sectors.

Export Growth Hits Five-Year High

Exports surged by 4.2%, marking the highest growth rate since the third quarter of 2020, with semiconductors and petroleum products leading the charge. Imports also grew by 3.8%, primarily in energy sources.

The contribution of domestic demand to GDP growth shifted from negative to positive, and net exports also saw a slight increase, underscoring the resilience of South Korea's economy.