South Korea’s Economy Contracts in Q1

South Korea’s economy contracted by 0.2% quarter-on-quarter in the first three months of 2025, ending two straight quarters of expansion, final data showed.

On the expenditure front, private consumption dipped by 0.1%, as expenditures on goods, notably communication equipment, increased while expenditures on services, particularly in recreation, sport & culture, decreased.

Government consumption remained at the same level from the previous quarter, as expenditures on health care benefits decreased while expenditures on goods increased.

Construction investment fell by 3.1%, led by a decrease in building construction.

Meanwhile, facilities investment dropped by 0.4%, primarily due to a decrease in machinery, including semiconductor manufacturing equipment.

Exports fell by 0.6%, as exports of chemical products and machinery & equipment declined.

Imports also dropped by 1.1%, as imports of energy items like crude oil and natural gas decreased.