South Korea's economic growth outperforms expectations as the chip boom continues to drive growth.

The thriving chip industry driven by artificial intelligence has propelled the growth of the South Korean economy in the second quarter, exceeding expectations and providing a basis for further interest rate hikes. The Bank of Korea announced on Thursday that the country's GDP grew by 0.6% on a quarter-on-quarter basis in the second quarter, compared to a 1.8% increase in the first quarter. This figure was higher than the median expectation of 0.4% from economists surveyed by Bloomberg. While the impressive performance has slowed down compared to the fastest growth since the end of 2021 in the first quarter, the data released on Thursday continued a series of economic data stronger than expected, prompting the government, central bank, and International Monetary Fund to raise their forecasts for South Korea's economic growth multiple times. This will provide a basis for central bank officials to consider raising interest rates again in the coming months, after their first rate hike since 2023 last week. According to a survey of economists, they expect another rate hike in October, with a minority predicting it could happen at the meeting on August 27th.