The South Korean economy is estimated to have shrunk in the first three months of the year on a drop in capital investment and falling exports, the Bank of Korea said Thursday.
In the three months ended March 31, the country’s gross domestic product is projected to have backtracked 0.3 percent from the previous quarter, according to estimates from the central bank.
The reading marks the lowest growth since the fourth quarter of 2008, when Asia‘s fourth-largest economy contracted 3.3 percent on-quarter.
Bank of Korea Governor Lee Ju-yeol (Yonhap)
From the same period last year, the local economy expanded 1.8 percent in the January-March period, which also marks the slowest growth since the third quarter of 2009, according to the central bank.
The country’s capital investment plunged 10.8 percent on-quarter, while its exports dropped 2.6 percent. Its imports fell 3.3 percent over the cited period, according to estimates from the central bank.
The data came a week after the central bank lowered its growth outlook to 2.5 percent for the year from the 2.6 percent made in January, citing economic uncertainties and weaker-than-expected exports.
South Korea‘s economy expanded 2.7 percent in 2018, down from a solid 3.1 percent the previous year.
The slowing exports especially hurt the manufacturing sector, which posted a negative 2.4 percent growth from three months earlier.
The construction industry contracted 0.4 percent from the previous quarter with the country’s investment in construction dipping 0.1 percent over the cited period.
The service industry, on the other hand, expanded 0.9 percent from three months earlier.
Private and government spending somewhat offset the sluggish growth, increasing 0.1 percent and 0.3 percent, respectively, from three months earlier.
In a Cabinet meeting held Wednesday, the government approved a 6.7 trillion-won (US$5.8 billion) supplementary budget, which it says will boost the country‘s economic growth by 0.1 percentage point this year.
The government was expected to submit its extra budget bill to the National Assembly later in the day.
The gross domestic income increased 0.2 percent from the previous quarter when it contracted 0.1 percent.
However, on a year-on-year basis, the GDI contracted 0.6 percent, marking the lowest number since the first quarter of 2009, when it contracted 2.5 percent on-year. (Yonhap)