South Korea’s GDP grew more than expected in Q2 as consumption recovered

The South Korean central bank released preliminary estimates showing that South Korea’s gross domestic product (GDP) increased by 0.7% quarter-on-quarter. This was better than the growth of 0.6% in Q1.

Year-on-year, South Korea’s GDP grew by 2.9% in the second quarter.

South Korea’s Q2 GDP figures were driven by strong private consumption after the government announced the easing of strict measures to contain the spread of the coronavirus. Private consumption rose 3%, recovering from a 0.5% decline in Q1.

The South Korean economy was also boosted by the government’s increased spending budget. Just weeks after Yoon Suk-you took office in early May, the South Korean parliament approved an additional 62 trillion won ($47.33 billion) budget.

However, exports and spending on private company production declined due to the slowdown in the Chinese economy and the impact of the war in Ukraine, as well as the fact that countries around the world have switched to financial austerity policies to curb inflation.

South Korea’s exports fell by 3.1% in the second quarter compared with the previous quarter. This was the sharpest decline in two years, while private equity fell by 1%, declining for the fourth quarter in a row.

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