South Korea recorded the second-highest real GDP growth rate among member countries of the Organisation for Economic Co-operation and Development (OECD) in the first quarter of this year, supported by a strong rebound in semiconductor exports and a favorable base effect.
According to OECD data released on the 7th, Korea’s real GDP grew 1.7% in the first quarter, ranking second among 35 member countries that have reported their figures so far. Denmark topped the list with 1.9% growth, followed by Korea. Estonia recorded 1.1%, while Finland posted 0.9%. Data for several OECD members, including Greece, Iceland, and New Zealand, have not yet been released.
The performance marks a sharp turnaround from the previous quarter, when Korea’s economy contracted by 0.2%, ranking near the bottom among OECD members. The rebound reflects a recovery in exports, particularly in semiconductors, combined with a low base effect from the previous year.
The improvement in the semiconductor cycle has been a key driver of export growth. Strengthening demand for high-value memory products, including high bandwidth memory (HBM) and server DRAM, amid expanding AI infrastructure investment has contributed to a recovery in manufacturing output and investment sentiment.
With the global semiconductor market entering an upcycle led by AI demand, Korea’s export-oriented economy has benefited significantly, given the high share of memory semiconductors in its industrial structure.
Economists expect growth momentum to continue into the second quarter if the semiconductor recovery persists. A sustained export-led recovery could also lead to an upward revision of Korea’s full-year growth outlook.
The government currently projects 2.0% growth for this year, as outlined in its “2026 Economic Growth Strategy” announced in January. However, officials are increasingly suggesting that the final figure could be revised upward in the upcoming mid-year economic outlook update.
Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol recently stated that this year’s growth rate is likely to exceed 2%, adding that the extent of the increase will depend on the strength of the semiconductor cycle and external risks such as geopolitical tensions in the Middle East.
International organizations and domestic research institutes have also been revising their forecasts upward, with some projections suggesting that Korea’s economy could potentially grow above 3% this year if the semiconductor boom continues.
