South Korea GDP Growth at 5-Year-High


South Korea economy expanded 1.2 percent on quarter in the third quarter of 2015, accelerating from a 0.3 percent growth in the previous period and beating market expectations. It is the fastest expansion since the second quarter of 2010, as a rebound in private consumption and an increase in government spending and investment offset a decline in exports.

According to advance estimates, final consumption expenditure grew 1.3 percent, after remaining steady in the June quarter. Private consumption advanced 1.1 percent, rebounding from a 0.2 percent contraction as the Middle East Respiratory Syndrome outbreak receded. Government expenditure also grew at a faster 1.9 percent from 0.8 percent in the second quarter.

Gross fixed capital investment expanded by 2.9 percent, surging from 0.8 percent expansion in the June quarter. Construction investment rose 4.5 percent, accelerating from 1.6 percent, with increases in both building construction and civil engineering. Facilities investment expanded by 2.0 percent, following a 0.5 percent growth in the previous quarter. An increase in machinery investment and equipment offset a decline in transport equipment investment. Intellectual property products increased by 0.2 percent, reversing from a 0.7 percent contraction in the previous three months, centering around software investment. In contrast, exports  fell by 0.2 percent, following a 0.3 percent rise in the second quarter. Imports rose by 1.3 percent, accelerating from a 0.9 percent increase in the previous period.

On the production side, the manufacturing sector edged up  0.1 percent, slowing from 1.2 percent growth in the previous period, centering around the production of semiconductors and mobile phones. The electricity, gas and water supply rose 7.9 percent, after remaining unchanged in the June quarter, as the volume of electric power sold expanded, due to the rise of mean temperature in August and September, and the proportion of electricity generated by nuclear power increased. The construction sector grew by 5.3 percent, after remaining unchanged in the previous period, led by an expansion of building construction. The services sector expanded by 1.0 percent, after remaining unchanged in the second quarter, as all of the sub-sectors recovered from the impact of MERS. The agriculture sector also rose 6.5 percent, a reversal from a 12.2 percent drop in the June quarter. 

Year-on-year, the GDP advanced 2.6 percent in the September quarter of 2015, accelerating from a 2.2 percent expansion in the previous three months.

South Korea GDP Growth at 5-Year-High


Bank of Korea l Rida Husna | rida@tradingeconomics.com
10/23/2015 2:58:44 AM