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S. Korean economy grows revised 0.8 pct in Q3

The South Korean economy grew slightly faster than previously estimated in the third quarter on sustained exports, but the growth momentum slowed from three months earlier amid global economic uncertainty, the central bank said Tuesday.

Korea's gross domestic product (GDP), the broadest measure of economic performance, expanded a revised 0.8 percent in the July-September period, up from an earlier estimate of 0.7 percent, according to the Bank of Korea (BOK).

The third-quarter expansion slowed from the 0.9 percent on-quarter growth tallied in the second quarter and marked the slowest advancement since a 0.5 percent expansion in the fourth quarter of 2010.

From a year earlier, Asia's fourth-largest economy improved 3.5 percent, up from a previous estimate of 3.4 percent, the central bank added.

The growth data underpinned views that a downbeat global economic outlook and the eurozone debt crisis have begun to dent the Korean economy,

In the third quarter, exports weathered the global slowdown well, but domestic demand and facility investment grew at a slower pace than previously estimated, indicating that households and companies were reluctant to spend money amid high economic uncertainty.

A set of downside risks to growth led BOK policymakers to freeze the key interest rate at 3.25 percent for the fifth straight month in November.

Many analysts predict that the BOK will stand pat on the rate for this month and may cut the key rate next year in a bid to shield the economy from bleak global prospects.

Private think tanks and international organizations forecast that the Korean economy is likely to grow at an upper range of 3 percent next year.

The Organization for Economic Cooperation and Development

(OECD) predicted last week that Korea's economy is likely to grow

3.8 percent next year from an estimate of 3.7 percent this year.

BOK Gov. Kim Choong-soo earlier said that the Korean economy will grow slower than its earlier estimate of 4.3 percent this year and its growth may reach the low-4 percent range for next year. The BOK will announce its 2012 growth forecast on Friday.

Exports, which account for about 50 percent of South Korea's GDP, gained 1.6 percent on-quarter in the third quarter, up from an earlier projection of 1.4 percent.

Private spending, one of the main growth engines of the Korean economy, rose 0.4 percent, lower than a previous estimate of a 0.6 percent gain.

Facility investment fell 0.8 percent, compared with 0.4 percent contraction and construction investment gained 1.8 percent, down from an earlier estimate of a 2.2 percent expansion.

The country's gross national income (GNI), a gauge of measuring the actual purchasing power of the population, rose 0.8 percent in the third quarter, better than a 0.2 percent gain in the preceding quarter.

It marked the highest level since the second quarter of last year. The central bank said that the GNI improved last quarter as trade terms gained on-quarter due to a fall in oil prices. (Yonhap News)

 

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