South Korea's economy grew 1.7% in the first quarter of 2026 compared to the previous quarter, its strongest performance since Q3 2020 and nearly double the Bank of Korea's forecast of 0.9%, according to preliminary central bank data released Thursday. The expansion was driven by a 5.1% surge in exports — fuelled largely by global semiconductor demand — alongside gains in facility investment (up 4.8%) and a modest rise in private consumption. Despite the strong result, the BOK has cautioned that the Middle East conflict is weighing on growth momentum and that full-year 2026 expansion is likely to fall short of its earlier 2% projection.