S. Korea's Q1 gross national income hits all-time high of 647 trillion won

By Kim Byeo-ri, The Herald Business

South Korea's total national income hit an all-time high of 647 trillion won (about $418 billion) in the first quarter, as improved terms of trade — driven largely by the semiconductor sector — lifted household and corporate earnings. The 9.2 percent quarter-on-quarter growth rate also set a record.

According to preliminary national income statistics released by the Bank of Korea on Tuesday, real gross national income in the first quarter rose to 647 trillion won, up 9.2 percent from 592.6 trillion won in the previous quarter. Both the GNI level and the quarter-on-quarter growth rate were the highest since the statistics were first compiled in the first quarter of 1960. Compared with the same period last year, GNI expanded 13.2 percent.

Gross national income measures the total earnings received by a country's residents — including those living abroad — in return for their participation in productive activity.

The Bank of Korea attributed the result to rising semiconductor export prices, which improved the terms of trade, along with an increase in real net factor income from abroad.

A breakdown shows that the improvement in terms of trade drove a sharp swing in real trade profit, which turned to a surplus of 38.7 trillion won in the first quarter from a deficit of 1.6 trillion won in the previous quarter. Real net factor income from abroad also rose to 11.6 trillion won, up 8.3 trillion won from 3.3 trillion won the prior quarter. Net factor income from abroad — calculated by adding income earned by nationals overseas and subtracting income earned by foreigners domestically — bridges GDP and GNI by capturing the real purchasing power of a nation's residents.

The preliminary first-quarter real GDP growth rate came in at 1.8 percent quarter-on-quarter, up 0.1 percentage point from the flash estimate of 1.7 percent. Year-on-year, the economy grew 3.8 percent.

The Bank of Korea said the upward revision reflected actual data for the final month of the quarter that had not been available when the flash estimate was compiled, noting that equipment investment and private consumption were revised up by 1.8 percentage points and 0.1 percentage point, respectively.

The gross savings rate rose 5.7 percentage points from the previous quarter to 41.7 percent, as final consumption expenditure growth of 1.2 percent fell well short of the 11.2 percent rise in gross national disposable income. The household net savings rate edged down 0.3 percentage point to 8.8 percent.

The domestic investment rate fell 2.9 percentage points to 25.3 percent, as gross capital formation declined 0.4 percent while gross national disposable income surged 11.2 percent. The overseas investment rate climbed 8.6 percentage points to 16.3 percent.

The GDP deflator rose 12.9 percent from the same period last year. The deflator measures the overall price level by comparing nominal and real GDP and serves as a broad indicator of inflation.

The Bank of Korea also released final national accounts data for 2024 and preliminary figures for 2025 on Tuesday. Last year's real GDP growth rate was revised up 0.1 percentage point to 1.1 percent from the earlier preliminary estimate of 1.0 percent, while the 2024 figure was revised up 0.2 percentage point to 2.2 percent from a preliminary 2.0 percent. Per capita GNI last year was tallied at $36,963 (52.57 million won), up $108, or 0.3 percent, from the earlier preliminary estimate of $36,855.