South Korea’s economy likely saw steady economic growth in Q1

South Korea’s economy likely grew 0.6% last quarter, maintaining the same pace of expansion as in the previous three months, as improving exports offset weakening household consumption.

The trade-dependent economy experienced a notable uptick in export performance last quarter, buoyed by a resurgence in the semiconductor sector, a good indicator of global trade health.

Gross domestic product (GDP) for the January-March period grew 0.6% quarter-on-quarter on a seasonally adjusted basis.

The manufacturing and exports have remained strong, helped by an increase in global demand for semiconductors. Is expect exports to remain buoyant – although global growth is likely to struggle in the near term, a turn in the tech cycle should ensure that export growth holds up well.

However, uneven growth in China, South Korea’s biggest trading partner and a key driver of the global economy, could disrupt the ongoing recovery.

Moreover, Asia’s fourth-largest economy, one of the most indebted in the world, has experienced subdued growth due to spending being restrained by a cumulative 300 basis points of interest rate hikes by the Bank of Korea (BOK) since August 2021.

The central bank has said it needs to see inflation moving towards the bank’s 2% target before considering lowering borrowing costs, which will prolong the pressure on already slowing consumption. Inflation was 3.1% in March.