First quarter growth rate of 1.3%… Recovery of exports, construction investment, and private consumption

The Korean economy grew by more than 1% thanks to strong exports, construction investment, and private consumption.

The Bank of Korea announced on the 25th that the real gross domestic product (GDP) growth rate (compared to the previous quarter) in the first quarter of this year was 1.3%. This is the highest quarterly growth rate in two years and three months since the fourth quarter of 2021 (1.4%).

The quarterly growth rate, which fell behind in the 4th quarter of 2022 (-0.3%) along with a sharp decline in exports, is 1% this year, following the 1st quarter (0.3%), 2nd quarter (0.6%), 3rd quarter (0.6%), and 4th quarter (0.6%) of last year. The positive growth trend was maintained for five consecutive quarters until the quarter.

Looking at the growth rate in the first quarter by sector, construction investment increased by 2.7% as building and civil engineering construction both recovered.

Exports also grew by 0.9%, led by information technology (IT) items such as mobile phones, and private consumption increased by 0.8%, with goods such as clothing and services such as food and lodging all increasing. Government consumption increased by 0.7%, mainly due to product costs.

On the other hand, investment in facilities decreased by 0.8% due to the recession in transportation equipment, etc., and imports also decreased by 0.7%, mainly in electrical equipment.

In terms of growth rate by industry, the construction industry was the highest at 4.8%, followed by the electricity, gas, and water industry at 1.8%.

The manufacturing industry, centered on chemical products and transportation equipment, also grew by 1.2%, and the service industry grew by 0.7%, centered on wholesale, retail, lodging and food. Agriculture, forestry and fishing decreased by 3.1% due to a decline in the cultivation industry.

Reporter Jo Hee-seon