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South Korea GDP tops forecasts in Q2, lifting KOSPI and won
Bank of Korea data showed 0.6% quarter-on-quarter growth, while officials pointed to semiconductor exports, inflation at 3.2% in June, and support for the weaker won as reasons to keep tightening.
South Korea’s economy grew faster than expected in the second quarter, helped by robust semiconductor exports that offset weakness in construction investment, according to advance estimates released by the Bank of Korea and covered by LiveMint Markets. The central bank reported GDP rose 0.6% quarter-on-quarter on a seasonally adjusted basis in April to June, beating a 0.4% forecast in a Reuters poll.
On an annual basis, GDP expanded 3.7%, ahead of expectations for 3.5%. Bank of Korea officials said the economy could still reach around 3% growth for the year if quarterly expansion remains modestly above pace in the second half, the outlet said, with the central bank having raised its 2026 GDP forecast to 2.6% in May.
LiveMint Markets also noted that the stronger growth, alongside persistent inflation, has reinforced expectations for further monetary tightening. A Reuters poll indicated the Bank of Korea is likely to deliver at least one more rate hike this year, lifting the benchmark policy rate to 3.00%, then to 3.25% in the first quarter of 2027, and officials had cited consumer inflation rising to 3.2% in June and the need to support a weaker won.
The market reaction was positive, with the KOSPI gaining for a third straight session, rising 3.04% to 7,004.24 as of 0206 GMT, after adding more than 7% over the past three sessions. The Korean won strengthened to 1,467.6 per US dollar, its strongest level since mid-May, as optimism around artificial intelligence spending continued to underpin technology stocks, the outlet reported.
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