By Kim In-oh and Cho Jeehyun
South Korea’s gross domestic product (GDP) grew 0.6 percent in the second quarter against the previous three-month period, slower than preliminary rate of 0.7 percent released in July, casting a doubt on the country’s lately downgraded growth target of 2.9 percent for this year.
According to revised GDP data released by the Bank of Korea on Tuesday, the country’s real GDP totaled 398.0 trillion won ($357.4 billion) in the April to June period, up 0.6 percent from the previous quarter. The quarterly growth was revised down by 0.1 percentage point from July’s preliminary data and slower than the 1.0-percent growth pace in the first quarter.
On Tuesday, the main Kospi closed 0.38 percent higher at 2,315.72. The U.S dollar ended at 1,114.90 Korean won, up 4.6 won from the previous session.
The central bank said the growth in construction investment as well as in exports and imports was slower than the preliminary estimates, bringing down the overall economic growth figure.
Construction investment contracted 2.1 percent in the second quarter, bigger than the 1.3 percent drop estimated in July. The on-quarter growth for the facility investment was revised up to 5.7 percent drop from July’s estimate of 6.6 percent fall. It was still the worst since the first quarter of 2016.
Exports grew 0.4 percent in the first quarter, downgraded from the 0.8 percent gain in the preliminary data. Imports shrank 3.0 percent, larger than the preliminary estimate of 2.6 percent on-quarter fall.
Private spending grew 0.3 percent, unchanged from the July preliminary data but the worst since the fourth quarter of 2016.
Government spending expanded 0.3 percent, also unchanged from the earlier estimate, but it was the slowest since the first quarter of 2015.
By sector, manufacturing output grew 0.6 percent, mainly led by the gain in the electronics and petrochemical sectors. Agriculture and fisheries output shriveled 2.8 percent and construction 3.1 percent, the worst since the first quarter in 2012.
Service output rose 0.5 percent with gains in the finance/insurance and retail/wholesale sectors.
Gross national income (GNI) in the second quarter after seasonal adjustment came at 407.1 trillion won, down 1.0 percent on quarter. GNI is the sum of all goods and services a nation produces plus income received from overseas.
The central bank last Friday held off rate increase at least until the next meeting in October amid poor job data and business sentiment, but vowed to maintain the expansionary position as it predicted inflationary pressure on the demand side to stay subdued.