South Korea’s real gross domestic product (GDP) shrank 0.2% in the first quarter of 2025 from the previous quarter, marking the economy’s first contraction in nine months, the Bank of Korea (BOK) said Thursday. The year-on-year figure also turned negative, down 0.1%, as both private and government consumption slipped and investment activity retreated sharply. Construction investment plunged 3.2% and facility investment declined 2.1%, while exports fell 1.1% on weaker demand for chemicals and machinery.

Real gross domestic income (GDI), which accounts for changes in terms of trade, fell by 0.4% quarter-on-quarter — a steeper drop than GDP — indicating a deterioration in national purchasing power. The BOK attributed the slowdown to delayed semiconductor demand, construction disruptions and large-scale wildfires, alongside broader drags from domestic political uncertainty and global trade friction. The central bank’s February projection had expected 0.2% growth for Q1.