South Korea’s economy shrank 0.2% q/q in Q1

Its first quarterly contraction since mid-2024 and missing forecasts for modest growth.

• Exports fell 1.1% (were + 0.8% in Q4 2024)
• private consumption also weakened amid growing concerns over U.S. tariff impacts

The data strengthens the case for further rate cuts, with the Bank of Korea expected to ease policy as soon as May.

Analysts now see the policy rate falling to 2.25% by Q3. Trump’s sweeping tariffs are seen as a key threat to the export-reliant economy.

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