South Korea Economy Grows in Q1, Avoids Recession

South Korea’s economy grow in the first three months of this year, avoiding the country’s first technical recession since 2020.

GDP increased 0.3% from the previous quarter in the January-March period, following a 0.4% contraction in the fourth quarter of last year. The average expectation from 16 economists polled by Reuters was for 0.2% quarterly growth.

The Bank of Korea forecasts that South Korea’s GDP will increase by 1.6% this year, up from 1.5% in 2022, somewhat higher than the IMF’s prediction of 1.5%. According to the central bank, the GDP increased 2.6% year on year in 2022.

According to the central bank, the GDP number was driven by 3.8% growth in exports and strong vehicle shipments, as well as a 0.5% gain in private consumption.

South Korea’s economy has been increasingly reliant on exports in recent years, owing to slow domestic demand. According to the trade ministry, March shipments were down 13.6% from the previous year due to sluggish demand for semiconductors and a worldwide economic slowdown.