Q1 Korean Economic Growth Rate Ranks 3rd in OECD... "Exports and Domestic Demand Expected to Recover"

OECD Q1 Economic Growth Rate Comparison
Korea Ranks 3rd Among Member Countries
OECD "Korea's Export and Domestic Demand Expected to Recover"

In the first quarter of this year, South Korea's economic growth rate ranked third among the member countries of the Organisation for Economic Co-operation and Development (OECD).

According to the OECD's data on first-quarter gross domestic product (GDP) growth rates by country released on the 28th, South Korea's first-quarter GDP growth rate was 1.3% quarter-on-quarter, the third highest among member countries. Among the 29 member countries that announced first-quarter growth rates, only Israel (3.3%) and Chile (1.9%) had higher growth rates than South Korea. In Israel's case, a significant base effect was at play due to the previous quarter's economic growth rate of -5.9%, caused by the war with the Palestinian militant group Hamas.

South Korea's first-quarter growth rate surpassed not only the overall OECD member countries but also the Group of Seven (G7) countries. The average GDP growth rate for all OECD member countries was 0.4% in the first quarter, and the G7 growth rate was 0.3%. South Korea's economic growth rate in the fourth quarter of last year was 0.6%, slightly higher than the OECD average of 0.3% and the G7's 0.4%, but the improvement was even greater in the first quarter.

The OECD evaluated that South Korea's economy improved in the first quarter thanks to improved private consumption and a rebound in investment. Private consumption increased by 0.8% in the first quarter, a significant increase from the previous quarter's 0.2%, and government consumption also rose by 0.7%, up from 0.5% in the previous quarter. Exports also continued to improve, contributing to growth with domestic demand accounting for 0.7 percentage points and net exports 0.6 percentage points of the 1.3% growth rate.

Among OECD member countries, 75% experienced economic growth in the first quarter compared to the previous quarter. Among G7 countries, the United Kingdom and Germany turned to growth with increases of 0.6% and 0.2%, respectively, after recording declines of -0.3% and -0.5% in the previous quarter. European countries such as Italy (0.3%) and France (0.2%) also showed growth.

On the other hand, the United States and Japan were assessed to have experienced economic slowdowns. The U.S. economic growth rate slowed from 0.8% in the fourth quarter of last year to 0.4% in the first quarter. The annualized rate was 1.6%, the lowest in two years, due to weakened consumption and increased imports. Japan's economic growth rate turned negative, dropping from 0.5% in the fourth quarter of last year to -0.5% in the first quarter. Japan was also affected by decreased consumption and slowed exports.

The OECD forecast South Korea's economic growth rate for this year at 2.6%, higher than the Bank of Korea's forecast of 2.5%. South Korea's economic growth forecast ranks among the top among OECD member countries. It is the fourth highest among OECD countries after Costa Rica (3.6%), T?rkiye (3.4%), and Poland (2.9%). Among countries with a per capita national income of over $20,000, it is tied with the United States (2.6%) for the highest rate.

The OECD predicted that the South Korean economy will move out of a temporary lull and gradually strengthen its growth momentum. With global semiconductor demand recovering and exports continuing to perform well, domestic demand is expected to recover from the second half of this year due to interest rate cuts. The OECD projected South Korea's economic growth rate for next year at 2.2%, the highest among G20 countries with a per capita national income over $20,000, tied with Australia.