GDP in Korea

Korea GDP (USD bn) | Economic News & Forecasts

Korea - GDP (billions of U.S. Dollars)

Second GDP release confirms sharp slowdown in Q1

According to a second GDP release, the economy grew 1.7% in the first quarter compared to the same quarter a year earlier, down from the 1.8% previously reported and the 2.9% growth logged in the fourth quarter of last year. In seasonally-adjusted terms, the economy shrank 0.4% in Q1 compared to the previous quarter, down from the 0.3% decrease previously reported and contrasting the 0.5% expansion in Q4.

A further deterioration in fixed investment (Q1: -8.6% year-on-year; Q4: -4.2% yoy) was confirmed to be primarily responsible for the economic slowdown in Q1, partly due to the struggling semiconductor sector. Alongside the downbeat investment reading, private consumption growth (Q1: +1.9% yoy; Q4: +2.8% yoy) and government consumption growth (Q1: +5.5% yoy; Q4:+7.1% yoy) both slowed.

Exports of goods and services decreased 0.2% in Q1, contrasting the 6.7% growth in Q4. Imports, meanwhile, plunged 5.1%, contrasting the 2.4% increase in Q4. Consequently, the external sector contributed 2.8 percentage points to economic growth in Q1 (Q4: +2.5 percentage points), the largest contribution since Q1 2013.

Looking ahead, growth will likely be moderate, as external pressures—chiefly a synchronized global slowdown in demand for technology and the escalating U.S.-Sino trade spat—weigh on exports. The government plans to boost the economy with a KRW 6.7 trillion (USD 5.9 billion) supplementary budget, which it unveiled on 23 April and is awaiting parliamentary approval. However, the bill is only making its way through Parliament very slowly and may not prove as impactful as the government would wish. This skepticism is summarized by Robert Carnell, chief economist at ING, who noted: “The government has a KRW 6.7tr stimulus package ready for implementation. They say it could be worth 0.1pp of GDP. That seems about twice as much as is likely”.

The Central Bank expects the economy to grow 2.5% in 2019. The analysts surveyed by FocusEconomics this month expect an expansion of 2.3% in 2019, which is unchanged from last month’s estimate. For 2020, our panel sees an expansion of 2.4%.

Korea - GDP (USD bn) Data

2013  2014  2015  2016  2017  
GDP (USD bn)1,371  1,485  1,465  1,500  1,624  

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Korea Facts

ValueChangeDate
Bond Yield1.551.55 %Jul 11
Exchange Rate1,1740.21 %Jul 11
Stock Market2,081-0.40 %Jul 11

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