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South Korea GDP growth up to 0.7% in Q2

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Staff Writer | July 27, 2016
South Korea trade
Korean economy   Private spending advanced 0.9 percent

The South Korean economy expanded a seasonally adjusted 0.7 percent on quarter in the three months to June of 2016.

It was accelerating slightly from a 0.5 percent growth in the previous period and in line with market expectations. A recovery in private spending and exports and rising investment led the expansion, preliminary figures showed.

Private spending advanced 0.9 percent, rebounding from a 0.2 percent fall in the first quarter and boosted by durable goods and semi-durable goods such as clothing. In contrast, government consumption slowed (up 0.2 percent compared to 1.3 percent).

Gross fixed capital formation jumped 2.6 percent, following a 1.2 percent increase in the first quarter and reaching the highest growth rate in a year.

Investment in facilities such as transport equipment increased 2.9 percent, recovering from a 7.4 percent decline in the first quarter; intellectual property products such as software went up at a faster 1.1 percent (0.3 percent in the previous period) and construcion investment slowed (2.9 percent from 6.8 percent in the previous period).

Exports grew 0.9 percent, recovering from a 1.1 percent fall in the previous period, as sales of goods such as semiconductor, petroleum and chemical products increased. Imports rose 1.9 percent, after slumping 3.1 percent, mainly due to crude oil and automobiles.

On a year-on-year basis, the economy advanced 3.2 percent, higher than a 2.8 percent expansion in the first three months of the year. Figures beat market expectations of a 2.9 percent growth, reaching the highest in seven quarters.

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