Korean economy grows revised 0.6% on-quarter in Q2: BOK

By Yonhap
  • Published : Sept 4, 2018 - 09:11
  • Updated : Sept 4, 2018 - 09:48

South Korea's economy grew at a slower-than-expected pace in the second quarter from three months earlier on sluggish construction investment, the central bank said Tuesday.

The country's gross domestic product expanded 0.6 percent in the April-June period, slowing down from a 1 percent on-quarter increase in the previous quarter, according to preliminary data by the Bank of Korea.

The latest reading marks a slight decrease from an earlier estimate of a 0.7 percent gain in July.

This file photo shows Bank of Korea Gov. Lee Ju-yeol. (Yonhap)

The BOK explained that investment in construction rose 0.8 percentage point lower than the July estimate, with growth of exports and imports also being revised down by 0.4 percentage point each.

From a year earlier, the local economy grew 2.8 percent in the second quarter.

In the second quarter, both facilities and construction investment swung to negative growth, fanning concerns that Asia's fourth-largest economy is losing steam.

Investment in facilities tumbled 5.7 percent over the cited period, marking the largest on-quarter drop since the first quarter of 2016. It rose 3.4 percent in the previous quarter.

Construction investment growth also fell to 2.1 percent in the second quarter from a 1.8 percent on-quarter growth in the January-March period. It was the second time that the sector's quarterly growth finished in negative terrain in two years following a 2.3 percent decline in the fourth quarter of 2017.

Private spending edged up 0.3 percent in the second quarter, an 18-month low, slowing down from a 1 percent rise in the fourth quarter and 0.7 percent in the first quarter.

Government spending climbed 0.3 percent in April through June, marking the slowest quarterly growth in more than three years.

Exports, which account for around 50 percent of the GDP, rose 0.4 percent on-quarter, slowing sharply from a 4.4 percent rise in the first quarter, while imports retreated 3 percent.

By production, the central bank said the manufacturing industry added 0.6 percent in the second quarter, while services grew 0.5 percent in the April-June period.

The construction sector, however, dipped 3.1 percent for a near six-year low due to a decline in housing construction and public works.

Meanwhile, the BOK said the country's real gross national income decreased 1 percent in the three-month period from a quarter earlier, backtracking from a 1.3 percent rise in the previous quarter.

The gross savings ratio reached 34.6 percent in the second quarter, hitting the lowest quarterly percentage since the third quarter of 2014, while the country's gross domestic investment ratio edged down 31 percent. (Yonhap)

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