South Korea’s economy shrank in the first quarter of 2025 as falling investment and weak consumer spending offset gains in net income from overseas, data from the Bank of Korea showed on Thursday. Real gross domestic product (GDP) declined 0.2% from the previous quarter, matching the central bank’s earlier estimate. On a year-on-year basis, growth was flat, highlighting persistent sluggishness in domestic demand.

Private consumption dipped 0.1% and construction investment dropped 3.1%, while exports fell 0.6% due to weaker shipments of chemical products and machinery. Facility investment edged down 0.4%, with semiconductor-related purchases declining. Real gross national income (GNI) rose 0.1% as net factor income from abroad increased, but worsening terms of trade widened the country’s real trade loss. The gross savings ratio fell to 34.9%, while the domestic investment ratio dropped to 28.9%, reflecting weakening economic momentum.