SEOUL, July 23 (Xinhua) -- South Korea's economy grew at a faster pace than expected in the second quarter, driven by semiconductor exports boom and robust investment in intellectual property, central bank data showed Thursday.
The seasonally adjusted real gross domestic product (GDP), adjusted for inflation, expanded 0.6 percent in the April-June quarter compared to the previous quarter, according to the Bank of Korea (BOK).
It outperformed market expectations of 0.3 percent, beating the BOK's own forecast of 0.2 percent unveiled in May.
The real GDP rebounded 1.8 percent in the first quarter on a quarter-on-quarter basis after contracting 0.1 percent in the previous quarter.
The continued Middle East conflict was offset by aggressive corporate research spending and soaring global demand for locally-made chips used for artificial intelligence (AI) chipsets.
The outbound shipment of the export-driven economy gained 1.4 percent in the second quarter from three months earlier thanks to strong demand for semiconductors, machinery and equipment.
Import added 0.8 percent amid higher demand for cars, machinery and equipment.
Investment in intellectual property products jumped 3.3 percent in the second quarter, marking the fastest increase in over 14 years since the first quarter of 2012 as tech firms ramped up research and development (R&D).
Private consumption, another growth engine of the Asian economy, edged up 0.4 percent, led by steady purchases of durable goods such as home appliances and higher spending on dining and accommodation.
Facility investment inched up 0.2 percent, supported by the ongoing procurement of semiconductor manufacturing equipment.
Construction investment fell 0.2 percent due to slowdown in civil engineering projects, but fiscal spending rose 0.2 percent on higher health insurance expenditures.
The better-than-expected economic growth raised expectations for additional interest rate hikes later this year.
The BOK increased its benchmark interest rate by 25 basis points to 2.75 percent in July, turning toward monetary tightening in about three and a half years since January 2023.
Earlier this month, the finance ministry revised up this year's growth outlook for the South Korean economy by 1.0 percentage point to 3.0 percent, higher than 2.6 percent estimated in May by the BOK.
By industry, the seasonally-adjusted production among manufacturers swelled 1.2 percent in the second quarter on a quarterly basis, spearheaded by computer, electronic and optical devices.
Output in the service industry advanced 1.1 percent, boosted by the wholesale and retail, the accommodation and food service, and the information technology.
Production in the construction industry dipped 1.9 percent, and output in the agriculture, fishery and forestry sector plummeted 7.1 percent.
Real gross domestic income (GDI) climbed 3.6 percent in the April-June quarter compared to the previous quarter.
From a year earlier, the real GDI surged 15.6 percent in the second quarter, representing the highest growth in over 38 years since the first quarter of 1988.
It indicated a sharp improvement in national purchasing power, caused by favorable terms of trade. ■