Data released by South Korea's central bank on Thursday indicates the nation's economy grew by 0.6% in the second quarter compared to the previous quarter, with strong exports offsetting downward pressures from persistent Middle East tensions.

According to preliminary figures from the Bank of Korea, the country's real gross domestic product (GDP) for the second quarter expanded by 0.6% from the first quarter.

While this pace of growth moderated from the 1.8% recorded in the first quarter, it significantly surpassed the central bank's earlier forecast of 0.2% made in May.

On a year-on-year basis, South Korea's second-quarter GDP grew by 3.7%, slightly below the 3.8% growth seen in the first quarter.

Breaking down the components, exports increased by 1.4% quarter-on-quarter in Q2, imports rose by 0.8%, and private consumption grew by 0.5%.

Net exports contributed 0.3 percentage points to the quarterly GDP growth, while private consumption added 0.2 percentage points.

Government spending increased by 0.2% from the previous quarter, and facility investment grew by 0.2%. However, construction investment declined by 0.2%.

The second quarter's real gross domestic income (GDI) surged by 15.6% year-on-year, marking the fastest growth rate since the first quarter of 1988, when it was 16.4%.

In its May forecast, the Bank of Korea projected the economy would grow by 2.6% in 2026.

However, the bank stated last week that it would modestly raise its economic growth forecast due to stronger-than-expected chip-driven export performance.

South Korea's exports in June reached a record $102.25 billion, a 70.9% increase from a year earlier, surpassing the $100 billion mark for the first time. Semiconductor exports within that total nearly tripled, soaring to a record $44.82 billion.