South Korea's Economy Beats Forecasts With 0.6% Q2 Growth on Chip Export Boom

South Korea's economy grew faster than expected in the second quarter as a semiconductor export boom offset a decline in construction investment and volatility in oil prices. Advance estimates from the Bank of Korea showed real gross domestic product expanded 0.6% in the April to June period from the previous quarter on a seasonally adjusted basis, ahead of the 0.4% median forecast in a Reuters poll and three times the central bank's own May projection of 0.2%. The figure marks a sharp deceleration from the exceptional 1.8% recorded in the first quarter but keeps annual growth of around 3% within reach, which would be the fastest expansion in five years. Net exports contributed 0.3 percentage point to quarterly growth and private consumption added 0.2 percentage point. The result follows record June exports of $102.25 billion, up 70.9% year on year, with semiconductor shipments nearly tripling to about $44.8 billion on global artificial intelligence demand. The finance ministry echoed the more optimistic outlook while flagging downside risks from renewed Middle East tension, potential shipping disruption and continuing tariff uncertainty. Policymakers began a tightening cycle with a 25 basis point increase in July.