South Korea’s economy grew a mere 0.3 percent in the third quarter from the earlier three-month period as estimated in preliminary guidance, while gross national income contracted for the first time since recession-hit first half of last year, data from the Bank of Korea showed.

According to July-September gross domestic product (GDP) and gross national income data (GNI) released by the central bank on Thursday, the country’s GDP added 0.3 percent on quarter and 4.0 percent on year, unchanged from last month’s guidance.

Exports largely sustained growth with 1.8 percent gain in the third quarter whereas domestic demand was weaker across the board if not for government spending addition of 1.3 percent.

Private consumption fell 0.2 percent, construction investment 3.5 percent and facility investment 2.4 percent.

They went against on-quarter gains of 3.6 percent in private consumption and 1.1 percent in facility investment in the second quarter when the GDP rose 0.8 percent.

During guidance release last month, the BOK maintained the economy could achieve annual growth of 4.0 percent as earlier estimated despite the setback in the third quarter. The fourth-quarter economy should add 1.04 percent to meet the target.

The Organization for Economic Cooperation and Development (OECD) in its revised outlook released on Wednesday also maintained 4.0 percent growth outlook for South Korea’s GDP for this year, while raising the growth estimate for next year to 3.0 percent in line with the BOK outlook from 2.9 percent projected in September.

Korea’s real GNI – total earned income of a country’s residents counting in earnings from foreign sources - declined 0.7 percent in the third quarter, the first fall since second and first quarter of 2020, as net overseas income halved to 4 trillion won from 8.8 trillion won in the second quarter, data showed.

Reflecting strong prices, the GDP deflator increased 2.3 percent on year in the third quarter versus 1.6 percent gain in the second quarter. The GDP deflator which divides the nominal GDP by the real GDP and multiplied by 100 measures the general price level of all goods and services produced in an economy. Import deflator jumped 20.3 percent on year in the third quarter.

By Hye-seung Seo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]