Korea: Second estimate confirms a sharp contraction in the first quarter
According to a second GDP release from the Bank of Korea, the economy contracted 1.3% in quarter-on-quarter seasonally-adjusted (qoqsa) terms in the first quarter, contrasting the 1.3% expansion in the final quarter of last year and slightly softer than the first estimate of a 1.4% decline. Moreover, the economy grew 1.4% in annual terms in Q1, down notably from 2.3% in the final quarter of last year, but up slightly from the 1.3% expansion previously estimated by the BOK.
The largest drop-off in private consumption since the Asian Financial crisis over two decades ago primarily drove the sharp deterioration in the first quarter (Q1: -6.5% qoq s.a.; Q4: +0.7% qoq s.a.). Moreover, government consumption growth slowed from 1.8% in Q4 last year to 1.4% in Q1, while gross fixed capital formation also softened from 4.7% growth in Q4 to 0.5% growth in Q1.
On the external front, exports of goods and services declined 1.4% quarter-on-quarter, contrasting the previous quarter’s 0.6% expansion. Similarly, imports of goods and services contracted 3.6% in the first quarter, contrasting the fourth quarter’s 0.4% increase.