South Korea's economic growth near 3-year low
2012-10-26 11:10:58
The South Korean economy grew at the slowest pace in nearly three years as the global slowdown hurt corporate investment, the latest figures from Bank of Korea revealed Friday.
The gross domestic product expanded 0.2 percent quarter-on-quarter in the third quarter, slower than the 0.3 percent increase recorded in the second quarter. This marked the weakest growth since the fourth quarter of 2009. However, the slowdown was not as bad as the 0.1 percent rate expected by economists.
Total investment dropped 1.5 percent sequentially in the third quarter, while investment in facilities fell 4.3 percent. On the other hand, investment in construction grew 0.2 percent.
Private consumption increased at a slightly faster pace of 0.6 percent and exports rose 2.5 percent. Imports were up 1.7 percent.
On the production side, falling output in agriculture and manufacturing were the main drag on GDP. Output of agriculture, forestry and fishing shrank 4 percent compared with the previous three months. Manufacturing output decreased 0.2 percent as production of transport equipment fell.
On an annual basis, GDP fell 1.6 percent in the third quarter, reversing some of the 2.3 percent increase in the second quarter.
Earlier this month, the Bank of Korea lowered its forecast for the country's 2012 GDP growth to 2.4 percent from its July estimate of 3 percent. The economy is seen expanding 3.2 percent next year.
According to the central bank, though private consumption will expand, the pace of recovery is expected to remain at a limited level due mostly to the housing market slump and household debt.
Exports will post a sluggish performance in 2012, but may show a modest recovery in 2013 as global import demand gradually recovers and growth in global trade pick up, according to the central bank's latest economic outlook report.
This month, the bank reduced the benchmark interest rate by 25 basis points 2.75 percent.
Separately, a monthly consumer survey by the Bank of Korea revealed Friday that consumer sentiment declined in October due to downbeat assessment of the future economic outlook. The consumer confidence index fell by one point from a month earlier to 98 in October.