South Korean economy likely slowed in Q2 after robust Q1 growth: Reuters poll
Shoppers walk past a discount sign of a shoe shop at Myeongdong shopping district in Seoul November 1, 2010. South Korea’s annual consumer inflation in October accelerated to its fastest in nearly two years, which may boost expectations for an interest rate rise later this month. REUTERS/Jo Yong-Hak (SOUTH KOREA – Tags: BUSINESS POLITICS)
Read a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
BENGALURU, July 21 : South Korea’s economy likely grew at a much slower pace in the second quarter compared to the first three months of the year, as robust export growth was offset by weakening domestic demand, a Reuters poll of economists showed.
Asia’s fourth-largest economy expanded by a seasonally adjusted 0.4 per cent in the second quarter of 2026, according to the median forecast of 24 economists, a slowdown from growth of 1.8 per cent in the January to March quarter, which was the highest in nearly six years. Forecasts for the survey taken July 7 to 20 ranged from 0.1 per cent to 1.0 per cent.
“Exports and investment are two key drivers for Q2 GDP, but domestic demand and consumption growth likely remain weak,” said Jeong Woo Park, Asia economist at Nomura. Consumers “looked very conservative about spending because outside chip sectors, other service sectors, manufacturing sectors, they continued to cut jobs.”
“So because of that, this is very much like a K-shaped growth pattern. I think that limited some possible impacts from strong chip cycles,” Park said.
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Exports rose about 71 per cent in June, their strongest pace in nearly half a century, as an AI-related spending boom helped semiconductor exports surge nearly 200 per cent to $44.8 billion. The economy recorded a trade surplus of $138.3 billion in the first half of the year.
On a year-on-year basis, gross domestic product (GDP) was forecast to grow 3.5 per cent, slower than the 3.8 per cent expansion in the first quarter, based on the median estimate of 29 economists.
While the finance ministry recently projected this year’s economic growth at 3.0 per cent, the highest in five years, up from 2.0 per cent, economists in a separate Reuters poll expected growth to average 2.8 per cent this year.
“The big picture though is that South Korea’s economy looks on track to achieve full-year growth in excess of 3 per cent, led by AI-related tailwinds and supported by signs that spillovers into the wider economy are beginning to materialize,” said Khoon Goh, head of Asia research at ANZ.
The Bank of Korea raised its benchmark interest rate for the first time in 3-1/2 years on July 16. Governor Shin Hyun Song said developments in all three areas — growth, inflation and financial stability — supported the hike. The central bank is expected to raise rates once more this year, according to a Reuters poll conducted before the meeting.
Source: Reuters
Sign up for our newsletters
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
About The Author
