South Korea Economy Expands 0.5% QoQ in Q1

The South Korean economy advanced 0.5 percent quarter-on-quarter in the March quarter of 2016, faster than an earlier projection of a 0.4 percent expansion in an earlier estimate, preliminary estimates showed. It is the weakest growth since the third quarter of 2015 as private consumption, facilities investment and exports contracted.

On the expenditure side, final consumption expenditure grew 0.1 percent, compared to a 1.3 percent expansion in the preceding quarter. Private consumption contracted by 0.2 percent (from +1.4 percent in Q4), as spending on durable and semi-durable decreased. Government spending grew by 1.3 percent (+1.0 percent in Q3). Gross fixed capital formation rose 1.3 percent after registering a 1.0 percent growth in the preceding quarter. Construction investment grew by 6.8 percent (from -2.4 percent in Q4), with an increase in building construction and civil engineering. Intellectual property products investment rose by 0.3 percent (from +0.7 percent), with increases in both R&D and other intellectual property product. In contrast, facilities investment contracted by 7.4 percent (from +0.5 percent), with decreases in machinery investment and transport equipment investment. Exports dropped by 1.1 percent (from +2.1 percent), as sales of goods such as petroleum & coal products and automobiles declined. Imports fell by 3.1 percent (from +3.2 percent), mainly on decreases in machinery and transport equipment.

On the production side, manufacturing sector fell by 0.2 percent (from +0.7 percent), as production of machinery & equipment and automobile products decreased. Electricity, gas & water supply contracted by 1.8 percent (from +0.8 percent). In contrast, construction sector expanded by 4.8 percent (from +0.7 percent), with increases in both building construction and civil engineering. Services sector rose by 0.5 percent (from +0.7 percent), centering around finance & insurance and health & social work. Agriculture, forestry & fishing also also grew by 6.5 percent, following a 2.6 percent decline in the December quarter.

Year-on-year, GDP advanced 2.8 percent in the March quarter 2016, compared to an earlier projection of a 2.7 percent growth.

South Korea Economy Expands 0.5% QoQ in Q1

Bank of Korea l Rida Husna |
6/2/2016 2:16:57 AM