Xinhua
24 Apr 2025

SEOUL, April 24 (Xinhua) -- South Korea's real gross domestic product (GDP), adjusted for inflation, marked the first downturn in three quarters on the back of slump in export, consumption and investment, central bank data showed Thursday.

The seasonally-adjusted real GDP contracted 0.2 percent in the January-March quarter compared to the prior quarter, after rising 0.1 percent both in the third and fourth quarters of last year, according to the Bank of Korea (BOK).

The first-quarter figure was far below an expansion of 0.2 percent estimated by the BOK in February.

Earlier this month, the central bank indicated the first-quarter GDP contraction amid lingering uncertainties such as the prolonged political uncertainty at home and the U.S. tariffs imposition.

On April 4, the constitutional court upheld a motion by the National Assembly to impeach President Yoon Suk-yeol over his short-lived martial law imposition last December.

With the court's decision, the conservative leader officially lost all presidential power and a snap presidential election was scheduled for June 3.

The BOK cut its benchmark interest rate by a quarter percentage point to 2.75 percent in February after slashing it by the same percentage point in October and November last year.

The International Monetary Fund (IMF) on Tuesday revised down this year's growth outlook for South Korea by 1.0 percentage point to 1.0 percent, far lower than 1.5 percent forecast by the BOK and the Organization for Economic Cooperation and Development (OECD).

Export, which accounts for about half of the export-driven economy, diminished 1.1 percent in the first quarter from the previous quarter due to lower demand for chemical products, machinery and equipment.

The outbound shipment turned downward after growing 0.8 percent in the fourth quarter of last year.

Import reduced 2.0 percent in the first quarter, marking the first slide in four quarters on weaker energy demand.

Private consumption, another growth engine of the Asian economy, slipped 0.1 percent in the first quarter compared to the previous quarter, posting the first slump in three quarters.

Construction investment dropped 3.2 percent in the cited quarter, keeping a downward trend for the fourth straight quarter, while facility investment retreated 2.1 percent on weaker demand especially for semiconductor equipment.

Fiscal spending dipped 0.1 percent owing to lower spending on national health insurance benefits.

By industry, the seasonally-adjusted production among manufacturers dwindled 0.8 percent in the first quarter from three months earlier.

Production in the construction industry decreased 1.5 percent in the quarter, continuing to fall for four consecutive quarters, but output in the agriculture, fishery and forestry sector gained 3.2 percent.

Output in the service industry was unchanged on downturn in the transport, the wholesale and retail and the eatery and lodging sectors that offset upturn in the finance and insurance and the information and communication sectors.

Real gross domestic income shrank 0.4 percent in the January-March quarter on a quarterly basis after growing for the past two quarters.