Nominal GDP Growth Hits 47-Year High, Driven by Semiconductors and Recovery in Consumption

[Anchor]

Boosted by increases in exports and consumption, the South Korean economy grew 0.6% in the second quarter of this year. The nominal GDP growth rate hit its highest level in 47 years, raising expectations that per capita national income could surpass 40,000 USD this year.

Here is a report from reporter Baegun.

[Reporter]

The Bank of Korea announced that real gross domestic product (GDP), which indicates how much the actual production of the South Korean economy has expanded, grew 0.6% in the second quarter compared to the previous quarter.

Exports increased by 1.3%, centering on semiconductors, machinery, and equipment, while private consumption also rose by 0.4%.

Net exports and domestic demand each contributed 0.3 percentage points to the growth rate.

[Kim Hwa-yong / Head of National Accounts Department, Bank of Korea: Not only has the operating profit of the semiconductor manufacturing industry increased significantly, but the trend of improved performance is also gradually spreading to other sectors beyond semiconductors, such as chemical products, transportation equipment manufacturing, and wholesale and retail in the service industry....]

Nominal GDP, which includes price fluctuations, increased by 26.4% compared to a year ago, marking the highest growth rate in 47 years since the third quarter of 1979.

As corporate performance improved, centered on semiconductors, total operating surplus—which reflects corporate operating profits—also surged by 18.5% from the previous quarter.

Real gross national income (GNI), which shows the actual purchasing power of South Korean citizens, also increased by 3.1%.

As income grew faster than consumption, the gross saving rate reached a record high of 45.6% since statistics began.

The Bank of Korea projected that if the stability of the exchange rate continues, there is a strong possibility that per capita GNI will exceed 40,000 USD for the first time this year.

It also stated that if the economy grows by 0.2% to 0.3% per quarter in the second half of the year, this year's growth forecast of 3.3% is also achievable.

(Video Editing: Ahn Yeo-jin)

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