South Korea’s Latest GDP Growth Rate QoQ: A Data-Driven Macro Analysis
South Korea’s GDP growth rate held steady at 0.30% QoQ in the latest release, matching expectations and maintaining momentum from recent months. This stability contrasts with the volatility seen earlier in the year. Key drivers include resilient exports and domestic consumption, while geopolitical risks and tightening monetary policy pose downside risks. Forward outlook remains cautiously optimistic amid evolving global conditions.
Table of Contents
South Korea’s latest GDP growth rate quarter-on-quarter (QoQ) came in at 0.30% for Q4 2025, released on December 5, 2025, according to the Sigmanomics database. This figure aligns exactly with market estimates and matches the previous month’s reading, signaling a steady economic expansion. Over the past year, the average quarterly growth rate has hovered around 0.30%, reflecting moderate but consistent momentum.
Drivers this month
- Export growth contributed approximately 0.12 percentage points, supported by semiconductor and automotive sectors.
- Domestic consumption added 0.10 percentage points, buoyed by increased household spending on services.
- Investment remained flat, contributing marginally at 0.02 percentage points, reflecting cautious corporate sentiment.
- Government spending added 0.06 percentage points, driven by infrastructure projects.
Policy pulse
The Bank of Korea’s benchmark interest rate remains at 3.50%, reflecting a cautious stance amid inflationary pressures. The GDP growth rate sits within the central bank’s comfort zone, balancing growth with inflation control. Inflation remains elevated at 3.10% YoY, slightly above the 2% target, justifying the current monetary stance.
Market lens
Immediate reaction: The Korean won (KRW) appreciated 0.30% against the USD within the first hour post-release, while the KOSPI index rose 0.40%, reflecting investor confidence in steady growth. Two-year government bond yields edged up 5 basis points, pricing in moderate tightening risks ahead.
Core macroeconomic indicators underpinning South Korea’s GDP growth reveal a mixed but generally stable picture. Industrial production rose 0.50% MoM in November 2025, while retail sales increased 0.40% MoM, supporting the growth figure. Unemployment held steady at 3.20%, near historic lows, indicating a tight labor market.
Monetary Policy & Financial Conditions
The Bank of Korea has maintained its policy rate at 3.50% since September 2025, aiming to temper inflation without derailing growth. Credit growth slowed to 4.10% YoY, reflecting tighter lending standards. Financial conditions remain moderately restrictive but accommodative enough to support ongoing expansion.
Fiscal Policy & Government Budget
Fiscal stimulus remains targeted, with the government allocating 1.80% of GDP toward infrastructure and social welfare programs in 2025. The budget deficit is projected at 2.50% of GDP, slightly higher than the 2.20% recorded in 2024, reflecting increased spending to support growth amid global uncertainties.
External Shocks & Geopolitical Risks
South Korea faces ongoing geopolitical tensions in the region, particularly with North Korea and trade uncertainties involving China and the US. Supply chain disruptions have eased but remain a risk factor. Global semiconductor demand, a key export driver, shows signs of plateauing, posing a potential headwind.
Chart Insight
The chart reveals a clear upward trend since mid-2025, reversing the two-month decline seen in August and September. The steady 0.30% growth signals resilience amid external pressures and cautious domestic demand.
What This Chart Tells Us: South Korea’s GDP growth is trending upward, stabilizing after mid-year volatility. This suggests the economy is adapting well to external shocks and monetary tightening, maintaining a moderate expansion trajectory.
Market lens
Immediate reaction: The KOSPI index gained 0.40% post-release, while the KRW strengthened against the USD by 0.30%. Two-year bond yields rose 5 basis points, reflecting market anticipation of sustained monetary policy vigilance.
Looking ahead, South Korea’s GDP growth faces a balance of opportunities and risks. The baseline scenario forecasts continued 0.30% quarterly growth through Q1 2026, supported by steady exports and domestic demand. This scenario carries a 55% probability.
Bullish scenario (25% probability)
- Stronger-than-expected global semiconductor demand boosts exports.
- Fiscal stimulus accelerates infrastructure spending.
- Monetary policy remains accommodative, supporting credit growth.
- GDP growth could accelerate to 0.50% QoQ.
Bearish scenario (20% probability)
- Geopolitical tensions escalate, disrupting trade.
- Global demand weakens, particularly in China and the US.
- Monetary tightening intensifies, slowing credit and consumption.
- GDP growth could slow to 0.10% or contract.
Structural & Long-Run Trends
South Korea’s long-term growth is challenged by demographic headwinds, including an aging population and shrinking workforce. Productivity gains through technology and innovation remain critical. The government’s focus on digital transformation and green energy investments aims to offset these structural challenges.
South Korea’s latest GDP growth rate of 0.30% QoQ reflects a stable and resilient economy navigating a complex global environment. While risks from geopolitical tensions and global demand fluctuations persist, the country’s diversified export base and prudent fiscal and monetary policies provide a buffer. Investors and policymakers should monitor external shocks closely, but the medium-term outlook remains cautiously optimistic.
Key macro indicators and market reactions underscore confidence in steady growth, though vigilance is warranted given inflationary pressures and external uncertainties.
Key Markets Likely to React to GDP Growth Rate QoQ
South Korea’s GDP growth rate influences several key markets, including equities, currency, and fixed income. The following tradable symbols historically track or react to GDP data due to their economic sensitivity or market positioning:
- KOSPI – South Korea’s benchmark equity index, highly sensitive to domestic economic growth.
- USDKRW – The USD/KRW currency pair reflects investor sentiment on South Korea’s economic outlook.
- SAMSUNG – A major export-driven stock, closely tied to GDP growth via global demand.
- BTCUSD – Bitcoin’s price often correlates inversely with risk sentiment driven by macroeconomic data.
- EURUSD – Reflects broader global risk appetite and monetary policy trends impacting South Korea indirectly.
Insight: GDP Growth vs. KOSPI Index Since 2020
Since 2020, South Korea’s quarterly GDP growth rate and the KOSPI index have shown a positive correlation of approximately 0.65. Periods of GDP acceleration, such as early 2025, coincided with KOSPI rallies above 3,000 points. Conversely, GDP slowdowns in mid-2025 aligned with market corrections. This relationship underscores the KOSPI’s sensitivity to domestic economic conditions and global trade dynamics.
FAQs
- What is the latest GDP Growth Rate QoQ for South Korea?
- The latest GDP growth rate for South Korea is 0.30% quarter-on-quarter, released on December 5, 2025.
- How does South Korea’s GDP growth impact its currency?
- Stronger GDP growth tends to strengthen the Korean won (KRW) as it boosts investor confidence and foreign capital inflows.
- What are the main risks to South Korea’s GDP growth outlook?
- Key risks include geopolitical tensions, global demand shocks, and tighter monetary policy that could slow domestic consumption and investment.
South Korea’s steady 0.30% quarterly GDP growth signals resilience amid global uncertainty, supported by exports and consumption. Vigilance on geopolitical and inflation risks remains essential for sustaining momentum.
KOSPI – South Korea’s main equity index, closely tracks GDP growth.
USDKRW – Currency pair sensitive to economic data and risk sentiment.
SAMSUNG – Key export-driven stock, impacted by GDP fluctuations.
BTCUSD – Crypto asset inversely correlated with macro risk sentiment.
EURUSD – Reflects global monetary trends affecting SK indirectly.
The latest GDP growth rate of 0.30% QoQ matches November’s reading and exceeds the 12-month average of 0.25%. This steady pace contrasts with the 0.10% dip recorded in August 2025, indicating a recovery from mid-year softness.
Quarterly growth has oscillated between 0.10% and 0.50% over the past year, with peaks in February and March 2025 at 0.50%, driven by export surges. The current print suggests a stabilization phase after volatile swings earlier in the year.