Seoul [South Korea], September 4 : South Korea's economy has shown signs of recovery, with a 0.7 per cent growth in the second quarter of the 2025, slightly surpassing the Bank of Korea's earlier estimate of 0.6 per cent, "thanks to stronger consumption and exports", Maeil Business Newspaper reported, citing the country's central bank statement.
The Bank of Korea (BOK) stated that the manufacturing sector experienced a 2.5 per cent expansion, driven by increased output in electronics, optical, and transport equipment. The services sector rose by 0.8 per cent, led by growth in retail, accommodation, food, and transport.
However, the construction sector contracted by 3.6 per cent due to weakness in building and civil engineering, as per Maeil Business Newspaper.
Private consumption increased by 0.5 per cent, with notable spending on cars and medical services. Government consumption grew by 1.2 per cent, primarily due to higher health insurance outlays, it said.
In terms of trade performance, exports jumped by 4.5 per cent, driven by strong demand for semiconductors and petrochemicals. Imports increased by 4.2 per cent, primarily due to higher energy product imports.
The Bank of Korea reported that real gross national income (GNI) rose by 1 per cent from the previous quarter, while nominal GNI increased by 2 per cent.
According to Maeil Business Newspaper, the country's real trade deficit narrowed significantly to 8.6 trillion won (approximately USD 6.18 billion) from 13 trillion won. Although there was a decline in net factor income from abroad, the reduced trade deficit helped offset this loss.
Net factor income from abroad measures the difference between income earned by a country's residents from foreign investments and income paid to foreign investors. In this case, the narrowing trade deficit suggests that South Korea's exports are performing well, particularly in sectors like semiconductors and petrochemicals.
The economy has struggled to regain momentum after expanding 1.2 per cent in the first quarter of 2024, only to contract or stagnate for much of the year. Growth dipped -0.2 per cent in the first quarter of 2025 before rebounding in the latest quarter.
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