The South Korean economy expanded 0.8 percent in the first quarter from three months earlier due mostly to increased construction investment while consumption and trade remained weak, revised central bank data showed Thursday.
Korea’s gross domestic product, the broadest measure of economic performance, picked up from a 0.3 percent expansion in the fourth quarter of last year, according to the data by the Bank of Korea.
The latest reading is in line with the central bank’s earlier estimate released in April.
From a year earlier, Asia’s fourth-largest economy grew 2.5 percent, slowing from a 2.7 percent expansion in the fourth quarter. It marks the fourth straight quarter of slowing growth on an on-year basis.
Consumer spending increased 0.6 percent from three months earlier, slightly up from a 0.5 percent growth in the previous quarter, while government spending growth stayed on par with the previous quarter at 0.2 percent.
Construction investment jumped 7.4 percent in the January-March period, turning around from a 7.8 percent drop three months earlier.
But facility investment growth sharply slowed to 0.2 percent from 4 percent in the previous quarter.
Exports gained 0.1 percent on-quarter, slowing from a 0.4 percent growth in the fourth quarter, while growth in imports also slipped to 0.6 percent from 0.7 percent.
The data comes amid growing fears that sluggish exports, hit by the weak Japanese yen, are likely to hamper recovery in the country’s heavily trade-dependent economy.
Outbound shipments dropped 10.9 percent on-year in May, falling the most in nearly six years, according to trade ministry data released earlier this month.
Both local and global institutions have slashed their growth forecasts for this year, with the Korea Development Institute cutting its forecast to 3 percent from 3.5 percent and the Organization for Economic Cooperation and Development slashing it to 3 percent from 3.8 percent.
The quarterly data, meanwhile, showed that the country’s real gross national income rose 4.2 percent, growing at the fastest clip in almost six years. The figure measures the population’s purchasing power.
“We believe that improved consumption-related indicators, such as the real GNI, will bode well for private spending,” said Kim Young-tai, director of the BOK’s National Accounts Division, referring to an increased output in the retail and service sectors.
Output in the service sector shifted to a 0.5 percent growth in April, buoyed by a 1.4 percent rise in the wholesale and retail output, according to the industrial output data compiled by Statistics Korea. (Yonhap)
