Bank of Korea releases preliminary national income data; semiconductor-driven trade gains push GNI to record 647 trillion won ($418 billion); nominal GDP posts best growth in 50 years
South Korea's gross national income surged to an all-time high of 647 trillion won ($418 billion) in the first quarter, as improved terms of trade — led by semiconductors — boosted national income. The quarter-on-quarter growth rate of 9.2 percent was also a record. The preliminary estimate for real GDP growth was revised up to 1.8 percent from the flash estimate of 1.7 percent, signaling a brighter economic outlook.
Nominal GNI and nominal GDP also posted their highest quarter-on-quarter growth rates in 50 years.
According to preliminary national income statistics the Bank of Korea released Tuesday, real GNI reached 647 trillion won in the first quarter, up 9.2 percent from 592.6 trillion won the previous quarter. Both the GNI level and the quarter-on-quarter growth rate were the highest since the series began in the first quarter of 1960. Compared with the same period last year, real GNI rose 13.2 percent.
Nominal GNI climbed 11 percent quarter-on-quarter in the first quarter, the highest since the first quarter of 1976, when it rose 12.7 percent — a roughly 50-year record.
GNI measures the total income earned by a country's nationals, including those living abroad, in return for their participation in production activities.
The Bank of Korea attributed the results to rising semiconductor export prices, which improved terms of trade, and an increase in real net factor income from abroad.
A breakdown shows that improved terms of trade drove a sharp swing in real trade profit and loss, which turned to a surplus of 38.7 trillion won in the first quarter from a deficit of 1.6 trillion won the previous quarter. Real net factor income from abroad also rose to 11.6 trillion won from 3.3 trillion won the prior quarter, a gain of 8.3 trillion won. Net factor income from abroad adds income earned by nationals overseas and subtracts income earned by foreigners domestically, bridging GDP and GNI by capturing the real purchasing power of a nation's residents. The preliminary first-quarter real GDP growth rate came in at 1.8 percent quarter-on-quarter, 0.1 percentage point above the flash estimate of 1.7 percent, and 3.8 percent higher than a year earlier.
The Bank of Korea said the upward revision reflected the inclusion of some final-month data for the quarter that had not been available when the flash estimate was compiled. Equipment investment and private consumption were revised up by 1.8 percentage points and 0.1 percentage point, respectively.
Nominal GDP expanded 10.5 percent quarter-on-quarter and 17.1 percent year-on-year. The quarter-on-quarter rate was the highest since the first quarter of 1976, while the year-on-year rate was the highest since the third quarter of 1995.
The gross savings rate rose 5.7 percentage points quarter-on-quarter to 41.7 percent, as final consumption expenditure growth of 1.2 percent fell well short of the 11.2 percent increase in gross national disposable income. The household net savings rate edged down 0.3 percentage point from the previous quarter to 8.8 percent.
The domestic investment rate fell 2.9 percentage points quarter-on-quarter to 25.3 percent, as gross capital formation declined 0.4 percent while gross national disposable income surged 11.2 percent. The overseas investment rate rose 8.6 percentage points to 16.3 percent.
The GDP deflator rose 12.9 percent from the same period last year. The deflator measures the overall price level by comparing nominal and real GDP and serves as a broad indicator of inflation.
The Bank of Korea also released final national accounts data for 2024 and preliminary figures for 2025 on Tuesday. Last year's real GDP growth rate was revised up to 1.1 percent from the preliminary estimate of 1 percent, while the 2024 figure was revised up to 2.2 percent from 2 percent. Per capita GNI last year was $36,963 (52.57 million won), up $108, or 0.3 percent, from the earlier preliminary estimate of $36,855.
kimstar@heraldcorp.com
