The Bank of Korea announced today that South Korea’s gross domestic product (GDP) for the first quarter of 2023 grew by 0.3% compared to the previous quarter. This figure remains unchanged from the preliminary estimate and indicates a steady recovery in the country’s economy, driven by an upturn in private spending.
Notably, this marks the second consecutive quarter of growth for South Korea’s GDP, suggesting that the nation has been successful in avoiding a technical recession. In the fourth quarter of 2022, the economy also saw a 0.3% expansion.
On a year-on-year basis, the first quarter GDP showed a growth rate of 0.9%, slightly decelerating compared to the 1.4% growth observed in the fourth quarter of 2022.
The key driver behind the GDP growth in the first quarter was the recovery in private spending, which experienced a notable increase of 0.6%. This surge came as the South Korean government eased COVID-19 restrictions, allowing individuals and businesses to resume economic activities more freely. Additionally, construction investment rose by 1.3%, while government spending saw a moderate uptick of 0.4%.
Furthermore, South Korea’s exports rebounded impressively in the first quarter, surging by 4.5%. This recovery follows a contraction of 3.8% in exports during the fourth quarter of 2022, indicating a positive turnaround in global trade conditions.
However, it is important to note that throughout 2022, South Korea’s GDP growth remained subdued, reaching only 2.6% compared to the 4.3% growth recorded in 2021. This slowdown can be attributed to the tightening monetary policies implemented by the Bank of Korea and central banks worldwide, aimed at managing inflationary pressures.