Korea: Economic growth slows in Q2
July 26, 2012
In the second quarter, GDP expanded 2.4% over the same period last year. The reading was below the 2.8% increase tallied in the previous quarter and missed market expectations of a 2.6% growth rate. The quarterly reading reflected a moderation in domestic demand, while the contribution from the external sector to overall economic growth improved over the previous quarter. Total consumption increased 1.8% annually in Q2, down from the 2.2% rise recorded in the previous quarter, as both private and government consumption weakened over the previous quarter. Furthermore, gross fixed investment dipped 1.5% in the second quarter, contrasting the 4.6% expansion seen in the first. Meanwhile, the external sector's net contribution to overall growth rose from plus 0.4 percentage points in Q1 to plus 1.4 percentage points in Q2, as exports outpaced imports. Exports of goods and services increased 3.2% annually (Q1: +4.7% year-on-year), while imports rose 0.7% (Q1: +4.4% yoy). A quarter-on-quarter comparison corroborates the slowdown suggested by the annual data. The economy expanded 0.38% over the previous quarter in seasonally adjusted terms, below the 0.86% expansion recorded in the first quarter.