South Korea Q1 GDP Accelerates 1.3% On Quarter

South Korea’s gross domestic product improved a seasonally adjusted 1.3 percent on quarter in the first quarter of 2024, the Bank of Korea said in Wednesday’s advance estimate.

That was in line with forecast and up from 0.6 percent in the previous three months.

Real gross national income (real GNI) increased by 2.4 percent on quarter in Q1.

On an annualized basis, GDP climbed 3.3 percent – just shy of expectations for 3.4 percent but still up from 2.2 percent in the three months prior.

On the production side, manufacturing increased by 0.9 percent, mainly due to increases in transportation equipment. Construction rose by 5.5 percent, as building construction and civil engineering both increased.

Services expanded by 0.9 percent, led by wholesale and retail trade, accommodation and food services and cultural and other services, while transportation and storage decreased.

On the expenditure side, private consumption grew by 0.7 percent, owing to increases in expenditures on both goods (e.g., clothing) and services (e.g., restaurants and accommodation). Government consumption rose by 0.8 percent, with increased expenditures on goods.

Construction investment expanded by 3.3 percent as building construction and civil engineering both increased. Facilities investment fell by 2.0 percent, with a decrease in transportation equipment. Exports rose by 1.8 percent, as exports of IT items (e.g., semiconductors, cellular phones) and petroleum products increased. Imports fell by 0.4 percent, owing to decreased imports of natural gas and electrical equipment.

Nominal GNI rose by 3.4 percent in the first quarter of 2024 relative to the quarter before, increasing more than nominal GDP (3.0 percent) as net factor income from the rest of the world increased.

Real GNI grew by 2.4 percent compared to the previous quarter, increasing more than real GDP (1.3 percent) as the terms of trade improved. The GDP deflator rose by 3.9 percent year on year.

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