South Korea Q1 GDP Falls More than Initially Estimated

South Korea’s GDP declined 0.4 percent on quarter in the first three months of 2019, down from the advanced estimate and market expectations of 0.3 percent and compared to a downwardly revised 0.9 percent expansion in the previous period. This was the slowest growth rate since Q4 2008. On the production side, GDP was dragged by contractions in manufacturing and construction. On the expenditure side, trade and gross fixed capital formation were the main draggers.

On the production side, output contracted sharply for manufacturing by 3.3 percent after a 1.6 percent climb in the previous three months, mainly due to lower production of computer & electronic & optical equipment. Also, construction fell 1.0 percent after a 0.8 percent advance in Q4, amid decreased residential building construction. Meantime, utilities remained unchanged following a 2.5 percent expansion. In contrast, services grew 0.8 percent after 0.5 percent growth, led by information & communication and finance & insurance.

On the expenditure side, final consumption went up 0.2 percent, easing from a 1.3 percent growth in Q4 2018, as both private (+0.1 percent vs +0.8 percent) and public spending (+0.4 percent vs +2.8 percent) slowed. Additionally, gross fixed capital formation plummeted 2.8 percent, after growing 1.9 percent in the previous quarter, mainly dragged by a 9.1 percent plunge in facilities. Meantime, exports declined 3.2 percent (vs -1.4 percent), amid lower sales of electrical and electrical equipment such as LCDs and semiconductors; and imports decreased 3.4 percent (vs 1.6 percent), as purchases fell for machinery & equipment and coal and petroleum products.

On an annual basis, the economy advanced 1.7 percent year-on-year, decelerating from a downwardly revised 2.9 percent growth in the previous quarter. It was the weakest growth rate since the third quarter of 2009.

The base year for the GDP data was changed to 2015 from 2010.

South Korea Q1 GDP Falls More than Initially Estimated

Bank of Korea | Mario |
6/4/2019 9:05:06 AM