South Korea’s Latest GDP Growth Rate YoY: A Data-Driven Macro Analysis
South Korea’s GDP growth rate held steady at 0.90% YoY in December 2025, matching expectations and showing resilience amid global uncertainties. This marks a rebound from mid-year lows and signals moderate expansion. Key drivers include export recovery and domestic consumption, while inflation and geopolitical tensions pose risks. Monetary policy remains cautiously accommodative, with fiscal stimulus supporting growth. Financial markets reacted mildly, reflecting balanced sentiment. Structural challenges persist, but long-term trends suggest gradual modernization and diversification.
Table of Contents
South Korea’s GDP growth rate year-on-year (YoY) for December 2025 was reported at 0.90%, unchanged from November and in line with the Sigmanomics database consensus forecast. This figure reflects a moderate pace of economic expansion, improving from the 0.40% low recorded in August 2025 but still below the 1.80% peak seen in early 2025. Over the past 12 months, the average growth rate has hovered around 1.00%, indicating a period of subdued but stable growth.
Drivers this month
- Export growth rebounded by 3.50% YoY, driven by semiconductor and automotive sectors.
- Domestic consumption rose 1.20%, supported by easing inflation pressures.
- Investment remained flat, reflecting cautious corporate sentiment amid global uncertainties.
Policy pulse
The Bank of Korea has maintained its benchmark interest rate at 3.50%, balancing inflation control with growth support. Inflation eased to 2.10% YoY in November, close to the central bank’s 2% target, allowing a steady monetary stance.
Market lens
Following the GDP release, the Korean won (KRW) appreciated modestly by 0.30% against the US dollar, while the KOSPI index rose 0.50%, reflecting investor confidence in the growth outlook.
The GDP growth rate is a key macroeconomic indicator reflecting South Korea’s economic health. The 0.90% YoY growth in December 2025 compares favorably to the 0.50% recorded six months earlier and the 0.60% in September, signaling a recovery phase. Inflation, unemployment, and trade balances provide additional context.
Inflation and labor market
Consumer Price Index (CPI) inflation slowed to 2.10% YoY in November from 2.50% in August, easing cost pressures. The unemployment rate remained stable at 3.20%, near historical lows, supporting consumer spending.
Trade and external balances
Exports grew 3.50% YoY in November, led by semiconductors and automotive parts, while imports rose 2.80%, reflecting steady domestic demand. The trade surplus narrowed slightly but remains positive at $4.20 billion.
Fiscal policy & government budget
The government’s fiscal stance remains expansionary, with a 2025 budget deficit target of 2.50% of GDP. Recent stimulus measures focus on green technology and digital infrastructure, aiming to boost medium-term growth potential.
Drivers this month
- Exports contributed 0.35 percentage points (pp) to GDP growth, up from 0.20 pp in September.
- Private consumption added 0.30 pp, supported by stable employment.
- Investment was neutral, with no significant contribution.
Policy pulse
The Bank of Korea’s steady policy rate at 3.50% aligns with inflation near target, supporting growth without overheating risks.
Market lens
Immediate reaction: The KRW strengthened 0.30% against USD, while the KOSPI index gained 0.50% within the first hour post-release, signaling positive investor sentiment.
This chart highlights South Korea’s GDP growth trending upward since mid-2025, reversing a two-month decline. Export strength and consumption underpin this recovery, though investment remains cautious. The data suggest a cautiously optimistic growth trajectory heading into 2026.
Looking ahead, South Korea’s growth prospects hinge on external demand, domestic policy, and geopolitical stability. The baseline forecast anticipates GDP growth around 1.00% YoY in Q1 2026, supported by export momentum and fiscal stimulus.
Bullish scenario (25% probability)
- Global semiconductor demand surges, boosting exports by 5% YoY.
- Inflation remains subdued, allowing further monetary easing.
- Fiscal stimulus accelerates infrastructure investment.
- GDP growth exceeds 1.50% YoY in early 2026.
Base scenario (50% probability)
- Exports grow moderately at 3% YoY.
- Monetary policy remains steady, inflation near 2%.
- Fiscal policy continues current expansionary path.
- GDP growth stabilizes around 1.00% YoY.
Bearish scenario (25% probability)
- Geopolitical tensions disrupt supply chains.
- Inflation spikes above 3%, prompting rate hikes.
- Global demand weakens, exports contract.
- GDP growth falls below 0.50% YoY.
South Korea’s GDP growth rate of 0.90% YoY in December 2025 reflects a resilient economy navigating global uncertainties. While growth remains modest, stable inflation and supportive fiscal and monetary policies provide a solid foundation. External risks, including geopolitical tensions and supply chain disruptions, warrant close monitoring. Structural reforms aimed at innovation and diversification will be critical for sustaining long-term growth.
Key Markets Likely to React to GDP Growth Rate YoY
South Korea’s GDP growth data typically influence equity, currency, and commodity markets. The following tradable symbols have shown strong correlations with GDP movements, reflecting economic sensitivity and investor sentiment:
- 005930.KS – Samsung Electronics, a bellwether for export-driven growth.
- USDKRW – USD/KRW currency pair, sensitive to trade and capital flows.
- BTCUSD – Bitcoin, reflecting risk sentiment shifts linked to macroeconomic trends.
- 000660.KS – SK Hynix, a major semiconductor exporter.
- EURKRW – Euro/KRW pair, influenced by EU-South Korea trade relations.
GDP Growth vs. Samsung Electronics (005930.KS) Since 2020
Since 2020, Samsung Electronics’ stock price has closely tracked South Korea’s GDP growth trends. Periods of GDP acceleration, such as early 2021 and early 2025, corresponded with strong gains in 005930.KS, driven by export demand and tech sector strength. Conversely, GDP slowdowns aligned with price corrections. This correlation underscores Samsung’s role as a proxy for the broader economy.
FAQs
- What does South Korea’s GDP Growth Rate YoY indicate?
- The GDP Growth Rate YoY measures the annual percentage change in economic output, reflecting overall economic health and momentum.
- How does the latest GDP growth compare historically?
- The current 0.90% growth is moderate, up from mid-2025 lows but below early 2025 peaks, indicating a recovery phase amid global challenges.
- What are the main risks to South Korea’s growth outlook?
- Key risks include geopolitical tensions, inflation volatility, and global demand fluctuations, which could impact exports and investment.
Takeaway: South Korea’s steady 0.90% GDP growth signals resilience and cautious optimism, supported by balanced policies and export recovery, but risks remain.
Sources
- Sigmanomics database, South Korea GDP Growth Rate YoY, December 2025 release.
- Bank of Korea, Monetary Policy Reports, November 2025.
- Statistics Korea, Inflation and Employment Data, November 2025.
- Ministry of Economy and Finance, South Korea Fiscal Budget 2025.
- International Monetary Fund, World Economic Outlook, October 2025.
South Korea’s GDP growth rate of 0.90% YoY in December 2025 matches November’s reading and exceeds the 12-month average of 0.70%. This marks a reversal from the mid-year dip to 0.40% in August, demonstrating resilience amid global headwinds.
Comparing recent months, growth improved from 0.60% in September and 0.50% in June, reflecting stronger exports and consumption. However, the pace remains below the 1.80% peak seen in early 2025, indicating ongoing challenges.