Consumption in Korea

Korea Consumption | Economic News & Forecasts

Korea - Consumption

Second release confirms stable growth in Q3

The Bank of Korea’s second GDP release confirmed the economy grew 2.0% in annual terms in the third quarter, matching the second quarter’s reading. In quarter-on-quarter terms adjusted for seasonality, the economy grew 0.4% in Q3, decelerating from the 1.0% expansion in Q2.

Fixed investment contracted again in Q3 but at a softer pace (Q3: -2.1% year-on-year; Q2: -3.4% yoy), while annual private consumption growth weakened marginally from 2.0% in Q2 to a revised 1.8% in Q3 (previously reported: +1.7% yoy). Moreover, government consumption growth eased marginally in Q3 to a revised 6.9% year-on-year (previously reported: +6.8%; Q2: +7.0 yoy).

Meanwhile, export growth accelerated to a revised 1.8% in Q3 (previously reported: +1.3% yoy; Q2: +1.2% yoy) and imports expanded a revised 2.3% in Q3 (previously reported: +2.0 yoy) after stalling in Q2. Overall, the external sector detracted a revised 0.1 percentage points from overall economic growth in Q3 (previously reported: -0.2 percentage points), contrasting Q2’s 0.5 percentage-point contribution.

Next year, economic activity is expected to accelerate. Particularly, accommodative fiscal and monetary stances, coupled with a tight labor market and strong wage growth, should protect the economy against external headwinds. That said, the rift with Japan and the U.S.-China trade war both cloud the outlook.

The Bank of Korea expects growth of 2.3% in 2020 and 2.4% in 2021. FocusEconomics Consensus Forecast panelists, meanwhile, expect the economy to grow 2.2% in 2020, which is unchanged from last month’s forecast, and 2.3% in 2021.

Korea - Consumption Data

2013  2014  2015  2016  2017  
Consumption (annual variation in %)1.7  2.0  2.2  2.6  2.8  

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Korea Facts

ValueChangeDate
Bond Yield1.671.55 %Nov 21
Exchange Rate1,1780.21 %Nov 21
Stock Market2,097-0.40 %Nov 21

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