Investment in Korea

Korea Investment | Economic News & Forecasts

Korea - Investment

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.

In May, the Bank of Korea projected the economy would decrease 0.2% in 2020. Meanwhile, last month FocusEconomics panelists penciled in a contraction of 1.1% in 2020, which was down 0.3 percentage points from the prior month’s estimate. In 2021, our panelists saw the economy growing 3.2%.

Korea - Investment Data

2014   2015   2016   2017   2018  
Investment (annual variation in %)3.1  5.4  6.6  9.8  -2.4  

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Korea Facts

Value Change Date
Bond Yield1.681.55 %Dec 31
Exchange Rate1,1560.21 %Dec 31

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