South Korea GDP contracts 0.1% within the first quarter amid political uncertainty

South Korea’s GDP shrunk 0.1% year-on-year within the first quarter of 2025, in line with advance figures, marking the primary contraction in its economic system for the reason that fourth quarter of 2020.

The GDP determine ignored the 0.1% upward push anticipated by means of Reuters’ ballot, and is a reversal in comparison to the 1.2% upward push within the final quarter of 2024.

Data from the Bank of Korea confirmed that the drop used to be most commonly because of a fall in building, with the field contracting 12.4% year-on-year.

In its financial coverage commentary on April 17, the Bank of Korea had warned that South Korea’s GDP enlargement for 2025 is anticipated to fall beneath its February forecast of 1.5%.

The BOK famous home financial enlargement has been weaker than anticipated, as home call for and exports have each slowed because of extended political uncertainties and deteriorated industry prerequisites.

South Korea’s first quarter has been marked with political uncertainty, because the impeachment trials of former president Yoon Suk Yeol and top minister Han Duck-soo dragged on.

The Constitutional Court struck down Han’s impeachment in March and reinstated him as appearing president, sooner than getting rid of Yoon from workplace on April 4. South Korea will cross to the polls on June 3 to make a choice a brand new president.

The nation’s export-led economic system has additionally been struck by means of the industry warfare turmoil. While U.S. President Donald Trump had quickly suspended his blanket “reciprocal tariffs” on April 9, South Korea remains to be matter to a 25% tariff on metal and vehicles, which can be one of the crucial nation’s greatest exports to the U.S.

South Korea’s Hyundai and Kia are some of the most sensible 8 best-selling manufacturers within the U.S. The nation could also be the fourth greatest exporter of metal to the U.S.

The GDP unlock additionally comes as a South Korean staff heads to the U.S. for industry talks, with appearing president Han reportedly pronouncing that he expects talks with the U.S to pave the way in which for a mutually really helpful end result.

South Korea’s ministry of industry, trade and economic system stated on Thursday the time table for the assembly with the U.S. is being coordinated and no longer but finalized.

This is breaking information, please take a look at again for updates.