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Korean economy grows 0.5 pct in Q2: BOK

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Published : 2014-09-04 09:07
Updated : 2014-09-04 09:11

South Korea's economy expanded 0.5 percent in the second quarter from three months earlier but at the slowest pace in over a year, central bank data showed Thursday.

Korea's gross domestic product, the broadest measure of economic performance, slowed from a 0.9 percent growth logged in the previous quarter, according to the revised data by the Bank of Korea.

The seasonally adjusted figure also slipped from an earlier estimate of a 0.6 percent growth made in late July.

Asia's fourth-largest economy expanded 3.5 percent on-year in the second quarter, but the growth was the slowest clip since the third quarter of last year.

Manufacturers supported growth with strong exports of chemical products and liquid crystal displays. The GDP of the manufacturing sector rose 0.9 percent on-quarter.

The service sector posted a 0.6 percent expansion as health care and welfare businesses offset sluggish showings by the restaurant and accommodation segments.

Exports, the key engine for the local economy, gained 1.7 percent from three months earlier, growing at the fastest rate in a year.

Private spending slipped 0.3 percent, reflecting the impact of the mid-April ferry disaster that damped consumer sentiment as the nation mourned for some 300 victims, mostly high school students on a school excursion. It also marked the first on-quarter contraction since the first quarter of last year.

Facility investment rose 1.1 percent, turning around from a 1.9 percent on-quarter decline three months earlier.

Spending on construction investment rose 0.4 percent, sharply slowing from a 5.1 percent growth registered in the previous quarter.

Weak spending, stemming from the Sewol disaster that was one of the country's worst peacetime disasters, has stoked worries it could derail the economy from its recovery track.

Finance Minister Choi Kyung-hwan, who took office in July, has unveiled several measures aimed at propping up lagging consumer sentiment and property transactions.

The central bank has also followed suit, lowering the base rate by a quarter percentage point in August for the first time in 15 months. (Yonhap)

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