After the South Korean economy achieved strong growth in the first quarter, the growth rate slowed in the second quarter. However, thanks to the strong performance of chip exports offsetting weak private consumption and construction investment, the country's economy remained resilient. Preliminary data released by the Bank of Korea on Thursday showed that after recording a 1.8% month-on-month increase in the first quarter, South Korea, Asia's fourth-largest economy, grew 0.6% month-on-month in the second quarter. Compared with the same period last year, the economy grew 3.7% year on year in the second quarter, and the revised increase in the previous quarter was 3.8%. The latest GDP figures have surpassed market expectations. Economists previously surveyed by the media predicted that GDP would grow 0.4% month-on-month and 3.4% year-on-year in the second quarter. In a context where the AI boom is driving strong demand for semiconductors, exports are still the main engine of growth. Korea is home to memory chip makers Samsung Electronics and SK Hynix, making it a major beneficiary of the global AI infrastructure boom. In the second quarter, exports of chips and machinery and investment in R&D and software development maintained steady growth, but private consumption weakened and construction investment shrank. Despite weakening economic momentum in the second quarter, analysts and policymakers remain optimistic about export-led growth prospects for the rest of the year.

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