Korea GDP

Korea

Korea: Revised data confirm economy grew at weakest rate in two years in Q1

June 4, 2015

In the first quarter, GDP expanded 2.5% over the same period last year, according to revised data provided by the Bank of Korea. The result was slightly above the 2.4% increase initially reported but marked a deceleration from the 2.7% increase registered in the fourth quarter of last year. Moreover, the growth tallied in Q1 was the weakest result in two years.

The slowdown in economic activity reflects that a deterioration in the external sector more than offset an improvement in the domestic sector. Fixed investment accelerated from a mild 0.7% increase in Q4 to a 2.4% expansion in Q1. Private consumption picked up slightly from a 1.4% increase in Q4 to 1.6% in Q1, while government spending increased 3.1% for a second straight period.

On the external front, exports of goods and services dropped from a 1.4% expansion in Q4 to a meager 0.1% increase in Q1, which marked the weakest result in more than five years. Imports jumped from a 0.2% rise in Q4 to a 1.9% expansion in Q1. As a result, the external sector’s net contribution to overall economic growth swung from plus 0.8 percentage points in Q4 to minus 0.9 percentage points in Q1.

A quarter-on-quarter comparison showed that GDP increased a seasonally-adjusted 0.8% in Q1, which was up from the 0.3% increase tallied in Q4. This figure was unchanged from the preliminary estimate.

The Bank of Korea sees the economy growing 3.1% in 2015 and 3.4% in 2016. FocusEconomics Consensus Forecast panelists foresee the economy growing 3.3% this year, which is down 0.1 percentage points from last month’s estimate. For 2016, the panel projects that the economy will expand 3.5% as well.


Author:, Economist

Sample Report

Looking for forecasts related to GDP in Korea? Download a sample report now.

Download

Korea GDP Chart


Korea GDP Q1 2015 0

Note: Year-on-year changes of GDP in %.
Source: Bank of Korea and FocusEconomics Consensus Forecast.


Korea Economic News

More news

Search form