South Korean Economy Expands 0.6% in Q4


The South Korean economy advanced 0.6 percent on quarter in the the three months to December of 2015, easing from a 1.3 percent expansion in the previous period while staying slightly below market expectations, first estimates showed. Household consumption and government expenditure were the main drivers of growth while construction investment contracted sharply.

On the expenditure side, private consumption expanded by 1.5 percent (+1.3 percent in Q3) as expenditures on both durable goods and services increased; and government spending grew by 1.2 percent (+1.7 percent in Q3). Construction investment fell by 6.1 percent (+5 percent in Q3), with a decrease in civil engineering. Facilities investment grew by 0.9 percent (+1.8 percent in Q3), led by the growth of investment in transport equipment, offsetting a decline of investment in machinery. Intellectual property products investment expanded by 0.3 percent (+0.1 percent in Q3), centering around R&D investment by government. Exports were up by 2.1 percent (-0.6 percent in Q3), led by those of goods such as chemical products and automobiles while imports rose at a faster 2.8 percent (+1.1 percent in Q3), as imports of petroleum and chemical products, and transport equipment increased.

On the production side, manufacturing grew by 0.6 percent (+0.1 percent in Q3), mainly due to an expansion in petroleum and chemical products, and semiconductors. Electricity, gas and water supply rose by 1 percent (+8.3 percent in Q3), mainly due to growth in the electricity supply, as the proportion of electricity generated by nuclear power with its high generating efficiency increased. Construction contracted by 0.4 percent (+5.6 percent in Q3), centering around civil engineering. Services expanded by 0.8 percent (+1 percent in Q3), as gains were seen in wholesale and retail trade, restaurants and hotels, transportation and storage, and health and social work. Agriculure shrank by 1.4 percent (+6.5 percent in Q3).

Year-on-year, GDP advanced 3 percent following a 2.7 percent expansion in the previous period and hitting its fastest pace since the third quarter of 2014.

For the whole of 2015, South Korea's GDP rose 2.6 percent compared to a gain of 3.3 percent in 2014.

South Korean Economy Expands 0.6% in Q4


Bank of Korea l Joana Ferreira | joana.ferreira@tradingeconomics.com
1/25/2016 11:37:25 PM