Consumption in Korea
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 |
Korea Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 1.67 | 1.55 % | Nov 21 |
| Exchange Rate | 1,178 | 0.21 % | Nov 21 |
| Stock Market | 2,097 | -0.40 % | Nov 21 |
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Economic News
Korea: Downturn in manufacturing sector softens as PMI hits a seven-month high in November
December 2, 2019
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) ticked up marginally from 48.4 in October to 49.4 in November, closing in on the 50-threshold that separates contraction from expansion in the manufacturing sector. The softer deterioration in November was driven by a slower fall in output and employment levels.
Korea: Price pressures perk up slightly in November
December 2, 2019
Consumer prices decreased 0.6% over the prior month in November, contrasting October’s 0.2% increase.
Korea: Exports continue to freefall in November
December 2, 2019
Merchandise exports decreased 14.3% year-on-year in November, marginally less than the 14.8% drop recorded in October, totaling USD 44.1 billion in November (October: USD 46.7 billion).
Korea: Industrial production contracts in October
November 29, 2019
Industrial production, which includes output from the mining, manufacturing, and electricity and gas sectors, dropped 2.5% year-on-year in October, contrasting September’s 0.4% increase.
Korea: Second release confirms stable growth in Q3
November 29, 2019
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.
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