South Korea Annual GDP Growth Weakest Since 2009

The South Korean economy expanded 1.8 percent year-on-year in the three months to March 2019, easing from a 3.1 percent growth in the previous quarter and well below market expectations of a 2.5 percent expansion, advanced data showed. It was the weakest growth rate since the third quarter of 2009, amid a sharp contraction in the construction sector and a slowdown in manufacturing.

On the production side, a slowdown was seen in all sector excluding construction, which shrank further. Manufacturing activity advanced 1.4 percent after a 5.5 percent expansion in the fourth quarter of 2018, and utilities increased 3.9 percent easing from 5.0 percent gain. Also, primary activity expanded 2.3 percent, following a 3.2 percent growth in the prior quarter; and services rose 2.6 percent, slightly below from a 2.7 percent gain. Additionally, construction plunged 7.9 percent after sinking 5.8 percent in Q4, contracting for the fourth consecutive quarter.

On the expenditure side, final consumption expenditure grew 2.7 percent after a 3.6 percent expansion in the last quarter of 2018, as private consumption slowed to 1.9 percent from 2.5 percent, and government spending growth moderated to 5.2 percent after a 7.1 percent jump. In addition, gross fixed capital formation plummeted 8.4 percent after dropping 3.8 percent in Q4, with facilities plunging 16.1 percent (vs -2.7 percent). Meantime, exports edged up 0.2 percent (vs +7.2 percent) and imports fell 5.4 percent (vs +2.5 percent). 

On a quarterly basis, GDP shrank 0.3 percent quarter-on-quarter in the three months to March 2019, after a 1.0 percent expansion in the previous three months and missing market consensus of 0.3 percent growth.

South Korea Annual GDP Growth Weakest Since 2009

Bank of Korea | Mario |
4/25/2019 10:58:02 AM