South Korea posted the highest first-quarter economic growth rate among major global economies this year.
According to the Bank of Korea's Economic Statistics System on the 12th, South Korea's real gross domestic product (GDP) grew 1.694% in the first quarter of this year, ranking first among 22 countries that had released preliminary figures as of the previous day.
Korea outpaced Indonesia (1.367%) and China (1.3%), both of which have maintained relatively strong growth.
Finland followed with the fourth-highest growth rate at 0.861%, trailed by Hungary (0.805%), Spain (0.614%), Estonia (0.581%), the United States (0.494%), Canada (0.4%), Germany (0.334%), Costa Rica (0.279%), Belgium (0.2%), Austria (0.197%), Italy (0.165%), the Czech Republic (0.153%), the Netherlands (0.051%) and Portugal (0.022%).
France (-0.005%), Sweden (-0.21%), Lithuania (-0.444%) and Mexico (-0.8%) contracted, while Ireland shrank more than 2% in the first quarter alone at -2.014%.
If South Korea holds onto the top spot even after other countries release their preliminary data, it would mark the country's first quarterly growth rate championship in 16 years, since the first quarter of 2010 (2.343%).
The surprise first-quarter growth was driven by exports, led by semiconductors. Exports surged 5.1% in the first quarter, centered on information technology (IT) items, with net exports (exports minus imports) contributing 1.1 percentage points.
With first-quarter growth exceeding expectations, full-year growth forecasts for South Korea are being revised upward. Major foreign investment banks (IBs) are raising their projections from the low 2% range to the mid-to-high 2% range. The previous day, the Korea Institute of Finance raised its 2025 growth forecast by 0.7 percentage point to 2.8% from 2.1%, and Deputy Prime Minister and Finance Minister Koo Yun-cheol said at a press briefing, "We expect this year's economic growth rate to exceed 2%."
However, it remains uncertain whether South Korea will sustain strong growth in the second quarter. Typically, a high growth rate in one quarter leads to a sharp decline in the next due to base effects. Growth in the first quarter was partly boosted by a contraction (-0.3%) in the fourth quarter of last year.
