Q1 Growth Rate 1.6%... Surprise Rebound Leads Government to Say "Economic Recovery Becoming Visible"

International Organizations and Global Investment Banks Exceed Forecasts
"Heading Toward Mid-to-High 3% Growth This Year"

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The government evaluated that the economic recovery has become visible as South Korea's economic growth rate in the first quarter recorded 1.6%.

The Ministry of Economy and Finance stated in a press release on the 27th, "The first quarter growth rate of 1.6% far exceeds the forecasts of international organizations and global investment banks, which were in the high 0% to 1% range."

On the same day, the Bank of Korea announced that the real gross domestic product (GDP, preliminary estimate) growth rate for the first quarter was 1.6% compared to the previous quarter. GDP, which converts goods and services produced domestically into market prices, is an indicator that gauges South Korea's economic growth trend. After recording negative growth rates in the first and second quarters of last year, it has shown positive growth for three consecutive quarters.

As a result, the first quarter GDP at market prices reached 470.8467 trillion won (seasonally adjusted series), surpassing the 468.8143 trillion won recorded in the fourth quarter of 2019. This means that the GDP level, which was eroded by the COVID-19 shock, has been recovered for now.

The government predicted a faster and stronger recovery than initially expected. It stated, "Considering the domestic economic recovery trend in April comprehensively, we believe that our economy can continue a growth trajectory exceeding the initial forecast of 3.2% this year."

Furthermore, it emphasized, "Among the Group of Twenty (G20), only eight countries are expected to recover their GDP levels to pre-COVID crisis levels this year, and among advanced countries, only the United States, South Korea, and Australia are included."

The government plans to accelerate the visible economic recovery. It said, "In the second quarter, we will strengthen communication with economic agents such as companies to enhance private sector resilience," and "We will continue the economic recovery trend by resolving export logistics issues." Additionally, proactive measures to stimulate consumption, such as the Korea Together Sale event and the resumption of tourism, culture, dining, and sports coupons, will be prepared.

The government is scheduled to announce the revised economic outlook and the economic policy direction for the second half of the year in June.

Meanwhile, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated on social media (SNS) on the same day, "Considering the expansion of recovery trends in exports and domestic demand comprehensively, our economy is expected to move toward mid-to-high 3% growth, exceeding the initial forecast of 3.2%."

This content was produced with the assistance of AI translation services.