To The Moon

Following a robust expansion in the first quarter, South Korea's economic growth moderated in the second quarter. Nevertheless, the economy demonstrated resilience, as vigorous semiconductor exports counterbalanced weakness in private consumption and construction investment.

Preliminary data released by the Bank of Korea on Thursday showed the nation, Asia's fourth-largest economy, grew 0.6% quarter-on-quarter in the April-June period. This followed a revised 1.8% quarter-on-quarter expansion in the first quarter.

Compared with the same period last year, the economy expanded 3.7% in the second quarter, following a revised 3.8% growth in the preceding quarter.

The latest gross domestic product figures surpassed market expectations. Economists surveyed by media had forecast a 0.4% quarter-on-quarter and a 3.4% year-on-year growth for the second quarter.

Exports remained the primary engine of growth, underpinned by strong semiconductor demand fueled by the artificial intelligence boom. South Korea, home to memory chip makers Samsung Electronics Co Ltd and SK Hynix Inc, is a key beneficiary of the global AI infrastructure build-out.

During the second quarter, exports of chips and machinery, along with investment in research and development and software, maintained solid growth. However, private consumption softened and construction investment contracted.

Despite the easing of growth momentum in the second quarter, analysts and policymakers remain optimistic about the export-led growth outlook for the remainder of the year.