Korea: Q4 GDP revised down
March 30, 2011
According to revised data released by the Bank of Korea (BOK), GDP expanded 4.7% in the fourth quarter over the same period of the previous year. The result was down a notch below the 4.8% advance estimate released on 25 January but was above the Q3 4.4% expansion. The downward revision was largely due to a base effect, as estimates for the fourth quarter of 2009 were adjusted to the upside. The revised Q4 2010 reading implied a more pronounced moderation in domestic demand, while the external sector provided a stronger contribution to overall growth. Private consumption increased 2.9% annually, which compared with a 3.2% expansion reported in the previous release. On the other hand, growth in gross fixed investment was revised upwards, from 2.1% to 3.4%, nonetheless marking a significant moderation compared to the 6.8% expansion recorded in the third quarter. Meanwhile, exports of goods and services rose 15.7% (previously reported: +14.9% yoy) while imports expanded 14.2% (previously reported: +14.6% yoy). As a result, the net contribution from the external sector to overall growth rose to 1.7 percentage points (previously reported: +1.2 percentage points). A quarter-on-quarter comparison corroborates the positive result suggested by the annual data, as the economy expanded 1.73% over the previous quarter in seasonally adjusted terms, up from the 1.13% increase observed in the third quarter. On a full-year basis, 2010 GDP growth was revised upwards to 6.2% (previously reported: 6.1%), which was above the 0.3% expansion recorded in 2009. The result represented the strongest annual expansion in eight years and was broadly in line with the Central Bank's expectations. The Central Bank expects GDP growth to moderate to 4.5% in 2011, before picking up again in 2012, when the economy is expected to grow at a 4.8% clip.
Author: Armando Ciccarelli, Head of Data Solutions