South Korea's nominal GDP expanded 26.4% year over year in the second quarter, marking the fastest pace of nominal growth in 47 years amid surging global demand for artificial intelligence and semiconductors.

Meanwhile, the country's real GDP advanced 3.7% year over year, matching preliminary estimates, according to data from the Bank of Korea on Tuesday.

The robust headline figures aligned with market expectations, driven largely by sustained strength in tech exports. Overseas shipments rose 1.3% during the quarter, while investment in intellectual property jumped 3.4% on solid R&D and software demand.

Facilities investment also edged up 0.2%, supported by capital spending on semiconductor manufacturing equipment.

Domestic demand showed continued resilience, with private consumption growing 0.4% across goods and services. Government spending ticked up 0.1% on higher healthcare spending, though construction investment slipped 0.1% due to softer civil engineering activity.

The 47-year nominal growth milestone coincided with an aggressive fiscal plan unveiled by South Korean President Lee Jae-Myung's administration. The government has proposed a record 821 trillion won national budget for 2027, up 12.8% from 2026. The investment is aimed at bolstering the country's semiconductor and AI supply chains.