South Korean shares closed slightly lower on Thursday, ahead of the key US-Korea tariff talks that are scheduled later in the day.

Deputy Prime Minister and Finance Minister Choi Sang-mok and Industry Minister Ahn Duk-geun are scheduled to meet with US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer later in the day to hold discussions regarding Washington's proposed 25% country-specific tariffs on Korean imports.

The Korea Composite Stock Price Index or Kospi fell by 3.23 points, or 0.13%, to close at 2,522.33. The Kosdaq remained unchanged at 726.08.

In economic news, South Korea's real gross domestic product decreased 0.2% in the first quarter of 2025 from the previous quarter, shrinking for the first time since Q2 2024, according to an advance estimate by the Bank of Korea on Thursday.

According to a median forecast of economists polled by Reuters, the country's real GDP was expected to grow 0.1% on a quarterly basis.

On an annual basis, the economy declined by 0.1% in Q1, which also missed forecasts of a 0.1% expansion as anticipated by economists in a Reuters poll.

Meanwhile, gross domestic income decreased 0.4% on an on-quarter basis in Q1 and fell 0.1% on an on-year basis, the release said.

In corporate news, LG Innotek (KRX:011070) posted first-quarter net income attributable to shareholders of the parent of 85.6 billion won, down 38.2% from 138.5 billion won a year earlier, according to a Wednesday filing with the Korea Exchange.

The electronic component manufacturing company's sales jumped 15% year over year to 4.983 trillion won from 4.334 trillion won.

Shares of the company fell more than 4% at market close on Thursday.