SKorean Q3 growth is slowest in four years
South Korea's economy grew at its slowest pace for four years in the third quarter due party to a faster than expected fall in exports, the central bank said on Friday.
By Agencies |
SEOUL: South Korea's economy grew at its slowest pace for four years in the third quarter due party to a faster than expected fall in exports, the central bank said on Friday.
Gross domestic product rose 0.6 per cent quarter-on-quarter in July-September compared with a 0.8 per cent rise in the second quarter, according to an advance estimate by the Bank of Korea.
It was the lowest figure since the economy grew 0.5 per cent in the third quarter of 2004.
Year-on-year growth was 3.9 per cent, sharply down from 4.8 in the second quarter and the weakest year-on-year growth since 3.4 per cent in the second quarter of 2005.
"The pace of the economic slowdown is quickening," Choi Chun-Sin, director general of the Bank of Korea's economic statistics department, told reporters.
"Global financial turmoil and the economic slump hurt domestic demand and it seems that export growth is losing steam faster than expected."
Choi said the economy this year is likely to grow less than the central bank's previous estimate of 4.6 per cent.
"Domestic demand remains sluggish and a global economic downturn is expected to dent export growth further next year," said Lee Sung-Kwon, an economist at Goodmorning Shinhan Securities.
"Another rate cut cannot be ruled out in November given worsening consumer sentiment," Lee told Yonhap news agency.
Goods exports fell 1.8 per cent quarter-on-quarter in the three months after rising 4.3 per cent in the second quarter.
Private spending, one of the main growth engines of Asia's fourth largest economy, gained 0.1 per cent compared with a 0.2 per cent contraction in the preceding quarter.
Capital investment rose 2.3 per cent in the third quarter after gaining 0.9 per cent three months earlier, and construction investment expanded 0.3 per cent after dropping 1.0 per cent in the previous quarter.
The weaker growth is expected to prompt the central bank to cut its key rate in November. It reduced the rate to 5.0 per cent from 5.25 per cent in October.
Central bank governor Lee Seong-Tae told parliament on Monday it would be difficult for the economy to grow by near 4.0 per cent levels until the first half of next year.
The economy expanded 5.0 per cent in 2007.
Gross domestic product rose 0.6 per cent quarter-on-quarter in July-September compared with a 0.8 per cent rise in the second quarter, according to an advance estimate by the Bank of Korea.
It was the lowest figure since the economy grew 0.5 per cent in the third quarter of 2004.
Year-on-year growth was 3.9 per cent, sharply down from 4.8 in the second quarter and the weakest year-on-year growth since 3.4 per cent in the second quarter of 2005.
"The pace of the economic slowdown is quickening," Choi Chun-Sin, director general of the Bank of Korea's economic statistics department, told reporters.
"Global financial turmoil and the economic slump hurt domestic demand and it seems that export growth is losing steam faster than expected."
ADVERTISEMENT
Choi said the economy this year is likely to grow less than the central bank's previous estimate of 4.6 per cent.
"Domestic demand remains sluggish and a global economic downturn is expected to dent export growth further next year," said Lee Sung-Kwon, an economist at Goodmorning Shinhan Securities.
"Another rate cut cannot be ruled out in November given worsening consumer sentiment," Lee told Yonhap news agency.
Goods exports fell 1.8 per cent quarter-on-quarter in the three months after rising 4.3 per cent in the second quarter.
ADVERTISEMENT
Private spending, one of the main growth engines of Asia's fourth largest economy, gained 0.1 per cent compared with a 0.2 per cent contraction in the preceding quarter.
Capital investment rose 2.3 per cent in the third quarter after gaining 0.9 per cent three months earlier, and construction investment expanded 0.3 per cent after dropping 1.0 per cent in the previous quarter.
ADVERTISEMENT
The weaker growth is expected to prompt the central bank to cut its key rate in November. It reduced the rate to 5.0 per cent from 5.25 per cent in October.
Central bank governor Lee Seong-Tae told parliament on Monday it would be difficult for the economy to grow by near 4.0 per cent levels until the first half of next year.
The economy expanded 5.0 per cent in 2007.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
