South Korea Q1 GDP Growth Strongest Since 2021

South Korea’s economy expanded by 1.7% QoQ in the first quarter of 2026, recovering from a 0.2% contraction in the previous quarter, and surpassing the market estimate of 1.0% growth, preliminary data showed. It marked the strongest GDP growth since the first quarter of 2021, driven by solid exports and resilient domestic demand. Exports grew 5.1%, driven by IT items such as semiconductors, while imports rose at a more moderate pace of 3.0%. Private consumption increased 0.5%, supported by higher spending on goods, while government consumption edged up 0.1%, also driven by increased goods spending. Construction investment climbed 2.8%, as both building construction and civil engineering activity rose. Facilities investment grew 4.8%, due to higher spending on machinery and transportation equipment. On an annual basis, the economy grew 3.6% in Q1, accelerating from 1.6% in Q4, marking the fastest growth since the fourth quarter of 2021 and exceeding forecasts of 2.7%.

South Korea’s economy contracted by 0.2% QoQ in the three months to December 2025, compared with an earlier estimate of a 0.3% contraction and reversing a 1.3% expansion in Q3. It marked the first quarterly contraction since the first quarter of 2025, driven by softer domestic demand and a decline in non-semiconductor exports. Private consumption rose 0.3%, as spending on services increased while expenditures on goods declined. Government consumption grew 1.3%, supported by higher spending on health care benefits. Construction investment fell 3.5%, as both building construction and civil engineering activity declined. Facilities investment dropped 1.7%, led by lower spending on transportation equipment. Exports decreased 1.7%, weighed down by declines in motor vehicles and machinery & equipment. Imports fell 1.5%, reflecting lower purchases of natural gas and motor vehicles. On an annual basis, the economy expanded 3% in Q4, exceeding forecasts of 2.5%.

South Korea’s economy contracted by 0.3% QoQ in the three months to December 2025, reversing a 1.3% expansion in Q3 and missing expectations for a 0.1% increase. It marked the sharpest quarterly contraction in three years, driven by weakening domestic demand and a 1% decline in non semiconductor exports. Private consumption rose 0.3%, supported by higher spending on services such as healthcare, though goods consumption fell, led by motor vehicles. Government consumption increased 0.6%, mainly reflecting higher healthcare benefit outlays. Construction investment dropped 3.9%, with both building construction and civil engineering weakening, while facilities investment fell 1.8% due to lower spending on transportation equipment. Exports declined 2.1%, dragged down by motor vehicles and machinery and equipment, while imports fell 1.7% amid lower purchases of natural gas and motor vehicles. On a year on year basis, the economy expanded 1.5% in Q4, undershooting forecasts of 1.8%.