Semiconductors Drive South Korea's Q1 GDP Growth to 1.7%, Highest in 5.5 Years
The Bank of Korea reported that South Korea's real GDP grew by 1.7% in Q1, the highest in nearly 5.5 years, driven by strong semiconductor exports and recovering private consumption, despite Middle East uncertainties.
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- 📰 Published: April 23, 2026 at 16:37
- 🔍 Collected: April 23, 2026 at 17:02 (24 min after Published)
- 🤖 AI Analyzed: April 23, 2026 at 17:45 (43 min after Collected)
Central News Agency
(CNA Reporter Yang Chi-fang, Seoul, 23rd) The Bank of Korea stated today that South Korea's real Gross Domestic Product (GDP) growth rate for the first quarter was 1.7% quarter-on-quarter, the highest in nearly 5 years and 6 months since Q3 2020. Despite the instability brought by the Middle East conflict, the economy showed growth driven by semiconductor exports.
According to Yonhap News Agency today, the Bank of Korea reported that the 1.7% real GDP growth in Q1 was nearly double the 0.9% forecast made in February. Quarterly growth rates improved from -0.2% in Q1 last year to 0.7% in Q2 and 1.3% in Q3, before dropping back to -0.2% in Q4; however, it rebounded this year.
The report pointed out that although US and Israeli airstrikes on Iran in late February triggered a Middle East conflict, the impact on Q1 was limited due to strong export support. Lee Dong-won, Director of the Economic Statistics Department at the Bank of Korea, stated that private consumption became the main force supporting growth. Coupled with strong exports centered on semiconductors and investments in expanding production capacity, overall economic growth was driven upward.
Lee Dong-won mentioned, 'After the war broke out, exports dominated by semiconductors maintained their strength. Although consumer sentiment weakened in April, looking at credit card usage from last week, private consumption has not yet been significantly affected.' Looking at different sectors, private consumption grew by 0.5% due to increased spending on goods like clothing, while government consumption increased by 0.1%, mainly in material expenditures.
Investment growth was significant: construction investment grew by 2.8% with simultaneous increases in building and civil engineering, while facility investment rose sharply by 4.8% due to increases in machinery and transportation equipment. Exports, dominated by IT products like semiconductors, grew substantially by 5.1%, the largest increase since Q3 2020 (14.6%); however, imports also increased by 3.0% due to machinery equipment and automobiles.
Lee Dong-won stated, 'Looking at semiconductor manufacturing, its contribution to growth is about 55%, slightly more than half.' Regarding the future outlook, he pointed out that while the Middle East conflict has indeed expanded negative impacts, with semiconductor exports remaining strong and government policy effects expected to emerge from Q2, the ultimate outcome will depend on the intensity and interaction of both positive and negative factors. (Editor: Tien Jui-hua) 1150423
(CNA Reporter Yang Chi-fang, Seoul, 23rd) The Bank of Korea stated today that South Korea's real Gross Domestic Product (GDP) growth rate for the first quarter was 1.7% quarter-on-quarter, the highest in nearly 5 years and 6 months since Q3 2020. Despite the instability brought by the Middle East conflict, the economy showed growth driven by semiconductor exports.
According to Yonhap News Agency today, the Bank of Korea reported that the 1.7% real GDP growth in Q1 was nearly double the 0.9% forecast made in February. Quarterly growth rates improved from -0.2% in Q1 last year to 0.7% in Q2 and 1.3% in Q3, before dropping back to -0.2% in Q4; however, it rebounded this year.
The report pointed out that although US and Israeli airstrikes on Iran in late February triggered a Middle East conflict, the impact on Q1 was limited due to strong export support. Lee Dong-won, Director of the Economic Statistics Department at the Bank of Korea, stated that private consumption became the main force supporting growth. Coupled with strong exports centered on semiconductors and investments in expanding production capacity, overall economic growth was driven upward.
Lee Dong-won mentioned, 'After the war broke out, exports dominated by semiconductors maintained their strength. Although consumer sentiment weakened in April, looking at credit card usage from last week, private consumption has not yet been significantly affected.' Looking at different sectors, private consumption grew by 0.5% due to increased spending on goods like clothing, while government consumption increased by 0.1%, mainly in material expenditures.
Investment growth was significant: construction investment grew by 2.8% with simultaneous increases in building and civil engineering, while facility investment rose sharply by 4.8% due to increases in machinery and transportation equipment. Exports, dominated by IT products like semiconductors, grew substantially by 5.1%, the largest increase since Q3 2020 (14.6%); however, imports also increased by 3.0% due to machinery equipment and automobiles.
Lee Dong-won stated, 'Looking at semiconductor manufacturing, its contribution to growth is about 55%, slightly more than half.' Regarding the future outlook, he pointed out that while the Middle East conflict has indeed expanded negative impacts, with semiconductor exports remaining strong and government policy effects expected to emerge from Q2, the ultimate outcome will depend on the intensity and interaction of both positive and negative factors. (Editor: Tien Jui-hua) 1150423