South Korea’s economy expanded faster than expected in the second quarter of 2025, supported by robust exports and improving private consumption, according to data released by the Bank of Korea (BOK) on Wednesday.
The country’s real gross domestic product (GDP) — a key indicator of economic growth — rose 0.7% from the previous quarter during the April–June period, 0.1 percentage point higher than the earlier forecast, based on the BOK’s preliminary report.
“This upward revision was made after incorporating actual performance data from the final month of the quarter, showing stronger-than-expected exports, construction investment, and intellectual property product investment, while facility investment was revised downward,” the BOK said in a statement.
The Q2 growth marked the strongest expansion since Q1 2024, when GDP grew 1.2%. On an annual basis, the economy expanded 0.6%, also 0.1 percentage point higher than earlier estimates.
This rebound follows a 0.2% contraction in Q1, which had been weighed down by domestic political turmoil after former President Yoon Suk Yeol declared martial law in December, along with external pressures from the sweeping U.S. tariff measures under President Donald Trump.
The BOK noted that private consumption showed signs of recovery as political uncertainty subsided, while exports exceeded expectations due to robust semiconductor shipments.
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Exports rose 4.5% quarter-on-quarter, driven by global demand for semiconductors and petrochemical products.
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Private consumption increased 0.5%, led by higher spending on automobiles and cultural activities.
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Government expenditure rose 1.2% during the same period.
However, facility investment fell 2.1%, and construction investment dropped 1.2%.
“Domestic demand is expected to continue a modest recovery, supported by the supplementary budget and improved consumer sentiment,” said BOK official Kim Hwa-yong at a press briefing. “However, the impact of U.S. tariffs will likely persist.”
Last week, the Bank of Korea raised its 2025 GDP growth outlook to 0.9%, up from 0.8% projected earlier.
“If the economy grows around 0.6% quarter-on-quarter in the second half, we can achieve the annual growth target of 0.9%,” Kim added.
Meanwhile, Gross National Income (GNI) climbed 2% quarter-on-quarter in Q2, with real GNI up 1%, reflecting improved terms of trade that helped offset real trade losses.