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Reuters
2 days ago
- Business
- Reuters
South Korea posts fastest economic growth since early 2024
SEOUL, July 24 (Reuters) - South Korea's economy grew at the fastest pace in more than a year in the second quarter, surpassing market expectations, buoyed by rebounding consumer spending and a surge in exports driven by demand for technology. The upbeat growth data could give the Bank of Korea more policy space, economists said, after it left interest rates unchanged this month but signalled the possibility of a cut in the next three months due to uncertainty from U.S. tariffs. "The BOK will have to raise its economic forecast for sure next month and it will provide more time to assess data on the financial stability front, which lowers the possibility of an August rate cut," said Cho Yong-gu, an economist at Shinyoung Securities. Gross domestic product expanded a seasonally adjusted 0.6% in the April-June period from the prior quarter when it contracted 0.2%, advanced central bank estimates showed on Thursday. It was stronger than the median 0.5% increase forecast in a Reuters poll and the fastest quarterly growth since the first quarter of 2024. The rebound comes as President Lee Jae Myung, who took office in June after a snap presidential election, made economic recovery a top priority. He introduced a supplementary budget, including a consumer voucher programme, to counter trade challenges and tepid consumption. South Korea held a snap presidential election on June 3, after the constitutional court in early April upheld former President Yoon Suk Yeol's impeachment over his failed martial law order, ending six months of political uncertainty. "The rebound in consumer spending was the brightest spot," Lee Jeong-hoon, an economist at Eugene Investment Securities, said. He expects stronger momentum in the second half, bringing annual growth above the central bank's May forecast of 0.8%. "Although exports will weaken, it won't be that severe, if the outcome of the trade negotiations is similar to that of Japan," Lee said. In the second quarter, private consumption rose 0.5% over the quarter on improving consumer sentiment and a stock market rally, while construction and facility investments each fell 1.5%, according to the Bank of Korea. Exports jumped 4.2%, led by semiconductors, after falling 0.6% in the previous quarter amid U.S. tariff uncertainty. It was the strongest quarterly performance since the third quarter of 2020. "In the second quarter, the impact of tariffs was limited as semiconductor exports remained robust and front-loading increased ahead of the imposition," a Bank of Korea official told a press conference, adding that tariffs would start to weigh in the third quarter. U.S. President Donald Trump's 25% "reciprocal" tariffs against the trade-reliant economy introduced in early April are currently paused until August 1 for trade negotiations, while U.S.-bound shipments in industries such as autos and steel have been hit by high product-specific tariffs. On an annual basis, Asia's fourth-largest economy grew 0.5% in the second quarter, compared with no growth in the first quarter and a 0.4% expansion expected by economists.
Washington Post
10-07-2025
- Business
- Washington Post
Asian shares mostly gain after big tech rally on Wall Street
Asian shares mostly gained on Thursday after a rally in U.S. tech stocks lifted the Nasdaq to an all-time high and helped Wall Street claw back most of its losses from earlier in the week. South Korea's Kospi climbed 1% to 3,164.26 after the Bank of Korea kept its benchmark interest rate unchanged and as semiconductor shares rose following Nvidia's overnight rally on Wall Street.
Reuters
10-07-2025
- Business
- Reuters
South Korea holds rates steady amid tariff, household debt concerns
SEOUL, July 10 (Reuters) - South Korea's central bank held interest rates steady on Thursday, as policymakers steered a cautious path amid concerns about financial stability risks stemming from rising household debt and economic pressure from U.S. tariffs. The Bank of Korea's seven-member monetary policy board voted to keep its benchmark interest rate (KROCRT=ECI), opens new tab unchanged at 2.50%, an outcome expected by all 33 economists in a Reuters poll. Concerns of financial stability risks in Asia's fourth-largest economy have grown in recent months, driven by home prices and household debt rising sharply on lower interest rates, prompting policymakers to introduce stricter mortgage rules. Economists expect the central bank, which has lowered interest rates by a cumulative 100 basis points in the current easing cycle that started in October, to deliver at least one more rate cut of 25 basis points this year to underpin the economic recovery. The government last week adopted a second supplementary budget for the year with a cash handout scheme to boost domestic demand, as President Lee Jae Myung, who took office on June 4, prioritises shoring up an economy grappling with trade risks and tepid consumption. Earlier this week, U.S. President Donald Trump ramped up the trade war he launched this year, telling partners, from powerhouse exporters such as Japan and South Korea to minor players, that they will face high tariffs from August 1. Governor Rhee Chang-yong will hold a press conference at 0210 GMT, which will be livestreamed via YouTube.
Reuters
10-07-2025
- Business
- Reuters
Bank of Korea holds interest rates steady, as expected
SEOUL, July 10 (Reuters) - South Korea's central bank held interest rates steady on Thursday, in line with expectations, as it steered a cautious path amid concerns about financial stability risks stemming from rising household debt and economic pressure from U.S. tariffs. The Bank of Korea's seven-member monetary policy board voted to keep its benchmark interest rate (KROCRT=ECI), opens new tab unchanged at 2.50%, an outcome expected by all 33 economists in a Reuters poll. Governor Rhee Chang-yong will hold a press conference at 0210 GMT, which will be livestreamed via YouTube.
Wall Street Journal
10-07-2025
- Business
- Wall Street Journal
Bank of Korea Holds Rates as Growth Concerns Ebb
South Korea's central bank kept interest rates steady Thursday in a widely expected move, amid easing concerns over the country's economic outlook. The decision follows a rate cut at the Bank of Korea's meeting in May, when it moved to support the flagging economy. Since then, exports have rebounded despite higher U.S. tariffs, and domestic political unrest has subsided.
