South Korea GDP Contracts For 1st Time Since 2008

The South Korean economy shrank 0.2 percent quarter-over-quarter in the three months to December of 2017, in line with earlier estimates and slowing from a downwardly revised 1.4 percent expansion in the prior quarter. It was the first contraction since 2008.

Final figures showed manufacturing shrank 1.7 percent after a 2.7 percent growth in Q3 (and vs -2.0 percent in preliminary estimates) and construction declined 1.6 percent compared to 1.0 percent (and -1.5 percent in the first estimate). Also, output growth lost steam for electricity, gas and water supply steam (0.4 percent compared to 1.7 percent in Q3 and a preliminary estimate of a 0.6 percent expansion) and services (0.3 percent  compared to 1.0 percent in the prior quarter and an inital 0.4 percent). In contrast, agriculture, forestry and fishing rebounded 0.2 percent, after contracting 1.8 percent in the previous period (vs a preliminary estimate of 2.2 percent).

By expenditure, gross fixed investment contracted 1.2 percent, following a 0.9 percent expansion in the third quarter of 2017 (vs -2 percent in the initial estimate), with construction and facilities dropping 3.8 percent and 0.6 percent, respectively. Additionally, exports fell 5.3 percent in the last quarter of the year compared to 5.6 percent (vs an initial -5.4 percent) and imports declined  2.9 percent following a 3.2 percent expansion (vs an initial -4.1 percent).  Meantime, final consumption expenditure grew less (0.9 percent compared to 1.0 percent), as government consumption expanded at a softer 0.5 percent from a 1.9 percent growth while private consumption rose faster (1 percent compared to 0.8 percent). 

Year-on-year, the economy of South Korea advanced 2.8 percent in the fourth quarter of 2017, below than an initial estimate of a 3.0 percent growth, and down from the 3.8 percent expansion in the previous quarter. Considering 2017 as a whole, the economy expanded 3.1 percent, above a 2.9 percent growth in 2016.

South Korea GDP Contracts For 1st Time Since 2008

Bank of Korea | Stefanie Moya |
3/28/2018 10:04:15 AM