South Korea’s economy is expected to have grown by 0.6% last quarter, according to a Reuters poll of economists. This growth rate is consistent with the previous three months, with improving exports offsetting weakened household consumption. The country’s trade-dependent economy saw a boost in export performance last quarter, particularly in the semiconductor sector, indicating positive global trade health.
The GDP for the January-March period is forecasted to have grown by 0.6% quarter-on-quarter on a seasonally adjusted basis, based on the median estimate of 21 economists. Despite soft consumer demand, manufacturing and exports have remained strong, supported by increasing global demand for semiconductors. This is expected to continue, even though global growth may face challenges in the near term.
On a year-on-year basis, GDP is projected to have expanded by 2.4% last quarter, faster than the 2.2% growth in the previous quarter. However, uneven growth in China, South Korea’s largest trading partner, could impact the ongoing recovery. Furthermore, the country’s high level of debt has led to subdued growth, with interest rate hikes by the Bank of Korea restricting spending.
The Bank of Korea has indicated that it will only consider lowering borrowing costs once inflation moves towards its 2% target. With inflation at 3.1% in March, the pressure on consumption is likely to continue. Despite these challenges, South Korea’s economy is showing signs of resilience and potential for further growth in the future.