South Korea's economy expanded 0.6% in the second quarter from the previous three months, surpassing the median forecast of 0.4%, as robust semiconductor shipments offset weakness in construction. On a year-on-year basis, gross domestic product grew 3.7%, also outpacing expectations.
Exports climbed 1.4% between April and June, led by demand for semiconductors, machinery and equipment. Private consumption rose 0.4%, while construction investment slipped 0.2%.
The Bank of Korea raised its policy rate by 25 basis points in July and has signaled it will lift its 2026 growth outlook above 2.6% due to stronger-than-expected chip exports. A central bank official noted that quarterly growth above -0.1% in the second half would secure full-year expansion of 3%. Analysts anticipate at least one more rate hike to 3.00% before year-end.