Korea: Revised GDP data confirm deceleration in third quarter
December 2, 2010
According to revised data released by the Bank of Korea (BoK) on 2 December, GDP expanded 4.4% in the third quarter over the same period last year. The reading inched down from the 4.5% advance estimate released on 27 October and came in below the 7.2% expansion recorded in the previous quarter. The deceleration was led by a deteriorating domestic sector, while the external sector improved slightly compared to the last quarter. Total consumption rose 3.3% annually, which was down from the 3.6% rise recorded in the previous quarter. In particular, both private consumption (Q2 2010: +3.7% yoy; Q3 2010: +3.3% yoy) and government spending (Q2 2010: +3.2% yoy; Q3 2010: +2.8% yoy) decelerated over the second quarter. Gross fixed investment grew 6.6% annually, which was slightly up from the 6.4% expansion recorded in the second quarter. Meanwhile, the net contribution from the external sector to overall growth stepped up from minus 0.7 percentage points in the second quarter to minus 0.5 percentage points in the third, as exports grew at a slower rate than imports. Exports of goods and services increased 11.1% annually (Q2: +14.1% yoy) while imports rose 14.7% (Q2: +19.3% yoy). A quarter-on-quarter comparison corroborates the deceleration suggested by the annual data, as the economy expanded 0.73% over the previous quarter in seasonally adjusted terms (, which was almost half the 1.43% increase observed in the second quarter. According to the Economic Outlook for 2011 released by BoK on 10 December, the Central Bank expects the economy to grow 6.1% in 2010, while moderating to 4.5% growth in 2011 and picking up again slightly in 2012, when GDP is expected to grow at a 4.7% clip.
Author: Armando Ciccarelli, Head of Data Solutions