BUSINESS

Korean economy grows 3.1% in 2017

By Yonhap
  • Published : Mar 28, 2018 - 09:51
  • Updated : Mar 28, 2018 - 09:55
The South Korean economy expanded a three-year high of 3.1 percent in 2017 on growth in construction and facility investment, with the real gross national income per capita closing in on the US$30,000 level, the central bank said Wednesday.

The revised 2017 reading by the Bank of Korea is on par with its earlier estimate of 3.1 percent released in January. It marked a slight improvement from 2016, when Asia's fourth-largest economy grew 2.9 percent from a year earlier, according to the revised data.

For the fourth quarter of last year, the economy contracted 0.2 percent on-quarter, rapidly cooling down from a 1.4 percent gain in the third quarter. It grew 1 percent in the first three months of 2017 and increased 0.6 percent in the next three months.


(Yonhap)

Facility investment soared 14.6 percent last year, the most in seven years, turning around from a 1 percent on-year contraction in 2016. Construction investment growth also lent support to the economy, adding 7.6 percent last year.

Private spending came in at 2.6 percent, up 0.1 percentage point from a year ago, marking the highest number in six years. Government spending also rose 3.4 percent in 2017, slowing down from a 4.5 percent rise in the previous year.

Exports, which account for around 50 percent of the GDP, rose 1.9 percent, slowing from a 2.6 percent increase in 2013, while growth in imports quickened to 7 percent from 4.7 percent.

By production, the central bank said the manufacturing industry rose 4.4 percent last year, posting the fastest on-year growth since 2011, when it hit 6.5 percent, while the construction sector grew 5.7 percent.

Services, however, rose at an eight-year low of 2.1 percent in 2017 due to sluggish growth in the wholesale and retail trade sectors, the BOK added.

Meanwhile, South Korea's per capita GNI, a gauge of the population's purchasing power, reached $29,745, up 7.5 percent from $27,681 tallied in 2016. It is widely expected that the country will pierce the $30,000 line for the first time in 2018.

"I'm sure that South Korea will achieve the $30,000 figure this year. We are really close," said Chung Kyu-il, director general of the Economic Statistics Department at the BOK. "It has taken 12 years to rise up from $20,000, two years longer that the average of 10 years for other countries because of the 2008 global financial crisis."

He said there are only nine countries in the world that have a per capita GNI of $30,000 or more with a population of over 20 million.

"It means that our average quality of life improved to a large extent, and we are following the stages of other advanced countries," the BOK official said. "Now we can put more effort, time and money into individuals' wellbeing, a better environment and social welfare."

The gross savings ratio reached 36.3 percent last year, hitting the highest percentage since 1998, when it was 38 percent, while the country's gross domestic investment ratio edged up to a six-year high of 31.2 percent. (Yonhap)