The South Korean economy unexpectedly shrank 0.2 percent on quarter in the three months to December of 2017, after expanding the most in seven years in the previous quarter.
It was the first contraction in 9 years among strong base effects, shorter number of working days due to 10-day Chuseok autumn holiday and a slump in car exports.
The contraction was reported for manufacturing (-2.0 percent in Q4 vs +2.9 percent in Q3) and construction (-1.5 percent vs +1.5 percent) while the growth decelerated for services (+0.4 percent vs +1.1 percent) and utilities (+0.6 percent vs +2.1 percent). On the positive note, primary activity rebounded 2.2 percent following a 3.7 percent plunge in the previous period.
By expenditure, gross fixed investment contracted 2 percent (vs +1.2 percent in Q3), with construction decreasing 3.8 percent and facilities 0.6 percent. Also, trade weighed negatively on activity as exports (-5.4 percent vs +6.1 percent) declined faster than imports (-4.1 percent vs +4.7 percent). Consumption rose only 0.9 percent (+1.2 percent in Q3), as a solid growth in private consumption (+1 percent vs +0.8 percent) was offset by a sharp slowdown in government consumption (+0.5 percent vs +2.3 percent).
Year-on-year, GDP grew by 3.0 percent after rising 3.8 percent in the previous quarter, also disappointing expectations of a 3.1 percent expansion. Considering full 2017, the economy expanded 3.1 percent, above 2.8 percent in 2016.
1/25/2018 1:31:01 PM