Nominal GDP increased by 26.4% compared to the same period last year… Total savings rate 45.6%, highest ever

In the second quarter of this year, the Korean economy continued its solid growth trend with both exports and private consumption increasing.

The Bank of Korea announced on the 8th that the real gross domestic product (GDP) growth rate (preliminary value compared to the previous quarter) in the second quarter was calculated to be 0.6%. This is the same as the breaking news announced on July 23rd.

The quarterly growth rate rebounded sharply from -0.1% in the fourth quarter of last year to 1.8% in the first quarter of this year and maintained a good level in the second quarter.

Exports in the second quarter increased by 1.3%, mainly in semiconductors, machinery and equipment, and imports also increased by 0.7%, mainly in automobiles, machinery and equipment.

Construction investment decreased by 0.1% due to a decrease in civil construction, and facility investment increased by 0.2% due to mixed increases and decreases in transportation equipment (-7.7%) and machinery such as semiconductor manufacturing machines (+2.3%).

Investment in intellectual property products increased by 3.4% due to an increase in research and development and software.

Private consumption increased by 0.4% as consumption of goods such as home appliances and services such as food and accommodation increased. Government consumption also increased by 0.1%, focusing on health insurance benefit spending.

Compared to the preliminary figures, the growth rates of construction investment and intellectual property product investment were each adjusted upward by 0.1 percentage points (p), and government consumption was lowered by 0.1 percentage points.

Looking at the contribution of each sector to the growth rate in the second quarter, net exports (export-import) increased the growth rate by 0.3%p. Although imports have increased, the increase in exports has had a bigger impact.

Domestic demand, including private consumption (+0.2%p) and investment in intellectual property products (+0.2%p), recorded 0.3%p. Government consumption, construction investment, facility investment, etc. all contributed 0.0%p.

By industry, manufacturing increased by 1.4%, centered on computers, electronics, and optical devices. Information and communication technology (ICT) manufacturing and non-ICT manufacturing industries increased by 1.5% and 1.4%, respectively.

The service industry increased by 1.0%. The wholesale, retail, lodging and food industries increased by 0.5%, and the transportation industry increased by 2.1%.

On the other hand, the construction industry overall decreased by 1.9% due to a decrease in civil engineering construction despite an increase in building construction.

Electricity, gas, and water businesses decreased by 0.6%, mainly due to water supply and raw material recycling, and agriculture, forestry and fisheries also decreased by 7.2% due to the slump in the agricultural and livestock industry, related service industries, and fishing.

Nominal GDP in the second quarter increased by 9.2% compared to the previous quarter. Compared to the same period last year, it increased by 26.4%, reaching the highest level in 47 years since the third quarter of 1979 (27.7%).

Nominal gross national income (GNI) in the second quarter increased by 8.8% compared to the first quarter. Nominal net foreign factor income decreased from KRW 13.7 trillion to KRW 12 trillion, but this was the result of an increase in nominal GDP.

Real GNI also increased by 3.1%. As the terms of trade improved and real trade profits increased significantly, it exceeded the real GDP growth rate (0.6%).

The total savings rate was 45.6%, up 3.9 percentage points from the previous quarter and reaching the highest level ever since statistics were published in 1970.