South Korea Economy Slows in Q2


South Korea GDP growth advanced 0.3 percent on quarter in the second quarter of 2015, down from a 0.8 percent expansion in the previous period and matching preliminary estimates. Higher government spending and exports were unable to offset a slowdown in investment and a contraction in private consumption.

On the expenditure side, private consumption shrank 0.2 percent, following a 0.6 percent expansion in the previous three month, mainly due to the impacts of Middle East Respiratory Syndrome outbreak. In contrast, government expenditure grew 0.8 percent, accelerating from a 0.2 percent expansion in the first quarter.

Gross fixed capital investment expanded by 0.8 percent, slowing from a 4.0 percent expansion in the March quarter. Facilities investment expanded 0.5 percent, accelerating from a 0.2 percent growth in the previous quarter. Construction investment grew by 1.6 percent, slowing from a 7.4 percent expansion in the three months to March. Intellectual property products declined by 0.7 percent, after registering a 2.3 percent increase in the preceding quarter. 

Exports grew by 0.3 percent, following a 0.1 percent rise in the first quarter. Imports rose by 0.9 percent, accelerating from a 0.6 percent increase in the previous period.

On the production side, the manufacturing sector grew by 1.2 percent, accelerating from 0.4 percent in the previous period. In contrast, the agriculture sector plunged by 12.2 percent, reversing from a 3.4 percent expansion in the first quarter. Other three sectors showed zero growth: electricitity, gas & water supply (from a 3.5 percent contraction in the March quarter), construction (from a 2.0 percent expansion) and the services sector (from a 0.9 percent expansion).

Year-on-year, the GDP advanced 2.2 percent in the second quarter of 2015, slowing from a 2.5 percent expansion in the first quarter. It is the weakest yearly growth since the third quarter of 2013.

South Korea Economy Slows in Q2


Bank of Korea | Rida Husna | rida@tradingeconomics.com
9/3/2015 11:13:28 AM