Korea Q3 GDP gain confirmed at 0.4% on qtr, GDP deflator lowest in 20 years

2019.12.03 10:26:26

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South Korea confirmed Tuesday the third-quarter gross domestic product gained 0.4 percent from the previous three months, unchanged from its earlier reading that did not fully count in October data.

Construction investment was adjusted down and private consumption and total exports slightly up, according to the Bank of Korea.

Asia’s fourth-largest economy is set to perform at its weakest in a decade this year. It added 1.0 percent in the second quarter after contracting 0.4 percent in the January-March period.

GDP deflator, which measures the impact of inflation on the GDP, slipped 1.6 percent, the lowest since the second quarter of 1999 when the country was on an international bailout after the Asian liquidity crisis. It marked the fourth consecutive quarter of decline, the longest losing streak on record.

Korea’s inflation has been stuck in zero territory since January. Consumer prices finally gained 0.2 percent in November from a year earlier after they dipped below zero in September and August.

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The central bank last week slashed Korea’s growth forecast to 2 percent from 2.2 percent for this year, and to 2.5 percent from 2.3 percent next year.

Output of the manufacturing and services sectors rose 2.4 percent and 0.6 percent, respectively, but this was offset by a 4.9 percent fall in construction activity.

Private consumption gained 0.2 percent, revised up from 0.1 percent. Government spending rose 1.4 percent, with facilities investment up 0.6 percent.

Exports rose 4.6 percent, up 0.5 percentage point from the previous estimate, on increased semiconductor and automobile shipments. Imports were also up 1.2 percent, led by transportation equipment. But construction investment fell 6.0 percent, down 0.8 percentage point from the previous estimate and the lowest reading since the third quarter of last year.

Construction demand turned sluggish amid toughened government measures to rein in runaway housing prices in Seoul.

Real gross national income, the sum of a country’s GDP plus net income from abroad, expanded 0.6 percent in the third quarter from the previous three months.

By Kim Hyo-jin

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