Economic Growth in Korea
South Korea's GDP growth from 2013-2022 was robust, driven by strong exports and technological advancements. The economy demonstrated resilience amid global trade tensions and regional geopolitical challenges. The COVID-19 pandemic led to a temporary setback in 2020, but a swift recovery followed, underpinned by strong technology sectors and effective pandemic management. South Korea's growth trajectory reflected its successful transition to a high-value, innovation-driven economy.
The Korean economy recorded an average growth rate of 2.7% in the decade to 2022, which is below the 4.4% average for the Asia-Pacific region. In 2022, the real GDP growth was 2.6%. For more GDP information, visit our dedicated page.
Korea GDP Chart
Note: This chart displays Economic Growth (GDP, annual variation in %) for Korea from 2014 to 2023.
Source: Macrobond.
Korea GDP Data
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Economic Growth (GDP, ann. var. %) | 2.3 | -0.7 | 4.6 | 2.7 | 1.4 |
GDP (USD bn) | 1,750 | 1,745 | 1,941 | 1,799 | 1,838 |
GDP (KRW tn) | 2,041 | 2,058 | 2,222 | 2,324 | 2,401 |
Economic Growth (Nominal GDP, ann. var. %) | 1.7 | 0.9 | 7.9 | 4.6 | 3.3 |
Economy records first contraction since Q4 2022 in the second quarter
GDP declined 0.2% on a seasonally adjusted quarter on quarter basis in the second quarter, contrasting the 1.3% expansion logged in the first quarter and marking the worst reading since Q4 2022. Q2’s contraction contrasted market expectations of a small expansion. On an annual basis, economic growth waned notably to 2.3% in Q2, following the previous period's 3.3% increase.
The quarter-on-quarter downturn was broad-based, with readings for private consumption, public spending, fixed investment and exports all weakening. Private consumption contracted 0.2% in Q2, marking the worst result since Q2 2023 (Q1: +0.7% s.a. qoq). Public spending growth edged down to 0.7% in Q2 (Q1: +0.8% s.a. qoq). Meanwhile, fixed investment plunged at the steepest rate in over two years, contracting 1.3% in the second quarter (Q1: +1.1% s.a. qoq). On the external front, exports of goods and services growth fell to 0.9% in Q2 (Q1: +1.8% s.a. qoq). Conversely, imports of goods and services rebounded, growing 1.2% in Q2 (Q1: -0.4% s.a. qoq).
Our Consensus is for the economy to return to growth in Q3, though growth is expected to remain muted by historical standards.
On the outlook, United Overseas Bank’s Ho Woei Chen said: “The weaker momentum in private consumption and investment suggest that South Korea’s growth may face some limitations in 2H24. We also expect some restocking in the quarters ahead given that inventories have corrected over the past year along with stronger export demand. For now, we maintain our forecast for 2024 GDP growth at 2.8%.” ANZ’s Krystal Tan said: “We think the economy is still broadly on track to meet our full-year 2024 growth forecast of 2.5%, which implies average growth of 0.5–0.6% q/q seasonally adjusted growth in Q3 and Q4. We expect the semiconductor sector to do the heavy lifting. Trade data for the first 20 days of July showed a 57.5% y/y rise in semiconductor exports, and export business surveys and a falling inventory-to-shipment ratio point to a robust outlook.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Korean GDP projections for the next ten years from a panel of 31 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Korean GDP.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Korean GDP projections.
Want to get access to the full dataset of Korean GDP forecasts? Send an email to info@focus-economics.com.
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