Surprise Growth Continues in Q2... KOSPI Recovers 7,000 Mark

[Anchor]

Boosted by a strong boom in semiconductor exports, South Korea's economy achieved surprise growth in the second quarter. As projections emerge that annual growth of 3 percent and a per capita gross national income of 40,000 dollars are within reach, the KOSPI also recovered the 7,000 mark today (July 23).

Reporter Kim Hye-min has the details.

[Reporter]

Real gross domestic product (GDP) continued its better-than-expected growth trend, rising 0.6 percent in the second quarter following a 1.8 percent increase in the first quarter.

This was driven by an unprecedented boom in semiconductor exports.

Real gross domestic income (GDI), which shows actual purchasing power and earnings, increased by 15.6 percent compared to the second quarter of last year.

While export volumes grew, the upward trend in export prices was even stronger, widening the gap between the two indicators.

[Lee Dong-won / Director General, Economic Statistics Department II, Bank of Korea: If the upward trend of real GDI continues, it will have the effect of expanding corporate investment capacity and household purchasing power, thereby having a positive impact on domestic industries.]

The facility investment growth rate expanded from 1.5 percent last year to 5.4 percent in the first half of this year, while private consumption grew from 1.5 percent to 2.5 percent.

It is estimated that at least 3 trillion won in consumption was generated in home appliances alone, driven by events such as Samsung Electronics' Onnuri gift certificate refund promotion.

An official from the Bank of Korea explained that semiconductor momentum has translated into private consumption, noting, "We understand that Samsung Electronics' Onnuri gift certificates are even being used at the Sokcho Central Market."

With the KOSPI surging significantly in the second quarter, consumption at department stores, as well as for clothing and bags, also increased.

Amid these trends, projections are emerging that an annual growth rate of 3 percent and a per capita gross national income of 40,000 dollars are achievable.

As purchasing power increases and inflationary pressures mount, additional interest rate hikes are becoming a fait accompli.

Some voices in the market are even forecasting a hike next month.

Experts pointed out that how to spread the warmth of high growth is an important policy task for the second half of the year.

[Professor Seok Byung-hoon / Department of Economics, Ewha Womans University: We believe that K-shaped (polarized) growth still persists. Recently, the delinquency rate for small and medium-sized enterprises has risen to an all-time high, and the delinquency rate for sole proprietors is also rising...]

The domestic stock market also received a boost.

Following Google parent Alphabet's announcement overnight of plans to expand semiconductor investments, coupled with news of the semiconductor-led surprise growth, the KOSPI recovered the 7,000 mark in 5 trading days.

(Video by Park Hyun-chul | Video Editing by Choi Jin-ki | Graphics by Jang Sung-beom, Hwang Se-yeon, Cho Soo-in)
※ Please note: This article was translated by AI and may contain errors.