South Korea's Economy Beats Forecasts in Q2 on a Semiconductor Export Boom

South Korea's economy expanded faster than expected in the second quarter, according to advance estimates from the Bank of Korea, as a boom in semiconductor exports offset a decline in construction investment. Real GDP rose 0.6% from the previous quarter, beating a median forecast of around 0.4% and far exceeding the central bank's own earlier projection, though the pace slowed from the first quarter's strong 1.8% expansion. On a year-on-year basis, output grew 3.7%, also topping expectations. Growth was driven by a gain in exports led by semiconductors, machinery and equipment, while private consumption rose modestly. A striking feature was real gross domestic income, which reflects the nation's purchasing power and jumped 15.6% year on year, its sharpest increase in nearly four decades, as robust chip shipments outweighed higher energy costs. Record monthly exports, which topped 100 billion dollars for the first time in June, underscored the strength of the technology cycle. The central bank has signalled it will likely raise its full-year growth outlook, and the strong momentum has reinforced expectations of additional interest rate moves.