South Korea’s Q1 GDP rose 1.7% q/q and 3.6% y/y (exp. 2.7%, prev. 1.6%), beating forecasts.
South Korea’s Q1 GDP rose 1.7% q/q and 3.6% y/y (exp. 2.7%, prev. 1.6%), beating forecasts. Growth was driven by a 5.1% surge in exports led by semiconductors, highlighting strong AI-linked demand and reliance on external drivers.
Summary: Q1 GDP: +1.7% q/q (exp. +1.0%) → strongest since Q3 2020 Y/Y GDP: +3.6% (exp. +2.7%, prev. +1.6%) → sharp acceleration Exports +5.1% → driven by semiconductors and AI demand Investment rebounds +4.8% after prior contraction Consumption modest +0.5%; government spending subdued South Korea’s economy delivered a strong upside surprise in the first quarter of 2026, supported by robust semiconductor exports and a rebound in investment, highlighting the country’s exposure to the global artificial intelligence cycle. Data from the Bank of Korea showed gross domestic product expanded 1.7% quarter-on-quarter in the January–March period, comfortably exceeding expectations for a 1.0% increase. The result marks the fastest quarterly growth since the third quarter of 2020, when the economy was rebounding from pandemic disruptions.
On an annual basis, growth accelerated sharply to 3.6%, up from 1.6% in the previous quarter and well above forecasts for 2.7%. The jump underscores a significant improvement in momentum, driven primarily by external demand. Exports were the key engine, rising 5.1% over the quarter, led by shipments of IT components, particularly semiconductors linked to artificial intelligence infrastructure.