South Korea is exceeding its pre-pandemic economy

South Korea led the developed world to join China in exceeding its pre-pandemic economy. Investment and exports helped it grow faster than anticipated.

The Ministry of Economy and Finance announced on April 27 that South Korea’s real GDP rose 1.6% from the previous quarter and 1.8% from a year ago in the first quarter of 2021. In contrast, most international organizations and global investment banks anticipated an increase of up to 1%.

Among developed economies, Korea’s recovery seems the fastest. According to the finance ministry, the milestone of recovering all output lost during the pandemic came a quarter earlier than anticipated. Significantly, China surpassed that level already in 2020, while the U.S. is on track to reach the mark in 2021.

The South Korean economy was the 10th-largest in the world as of the end of 2020. South Korea’s GDP for the first quarter of 2021 is 100.4. Its GDP for the fourth quarter of 2019 is 100. Meanwhile, the GDP of the United States, Japan, and Germany is 98.9, 97.7, and 94.9, respectively. Meanwhile, the United Kingdom, France, Italy, and Canada have GDP of 90.7, 95.2, 93, and 98.1, respectively.

The data follows positive growth reports from China and Singapore, which also indicates that the global recovery is gathering pace.

South Korea is on track to achieve growth in the mid-to-upper 3% range

From the previous quarter, facilities investment increased by 6.6%, while exports rose 1.9%. Government spending gained 1.7%, and private consumption recovered 1.1%. From a year earlier, the overall GDP grew 1.8%.

IMF recently estimated South Korea’s economic growth rate for 2021 at 3.6%. According to it, only eight out of the G20 countries are likely to return to the pre-corona level this year, mentioning South Korea, the United States, and Australia.

Prime Minister Hong Nam-ki announced the country is on track to achieve growth in the mid-to-upper 3% range, higher than the 3.2% earlier estimate.