Korean economy grows at faster pace in Q2 on robust private spending

Korean economy grows at faster pace in Q2 on robust private spending

A shopper selects vegetables at a market in Seoul, July 25. Yonhap

 

The central bank said on Tuesday that South Korea’s economy grew faster in the second quarter than it was three months ago, as consumer spending picked up amid deregulation of COVID-19 despite a slowdown in exports rice field.

Gross domestic product (GDP), the most comprehensive indicator of economic production, increased 0.7% quarter-on-quarter between April and June, accelerating from a 0.6% increase in the first quarter.

Bank of Korea (BOK).
Quarterly growth accelerated in the second quarter as exports slowed while consumer and government spending increased. Asia’s fourth-largest economy grew 2.9% year-on-year in the second quarter.

Private consumption increased by 3% in the second quarter due to increased spending on semi-durable consumer goods and services such as accommodation and restaurants.

On April 18, South Korea lifted most COVID-19 restrictions except Maskman Date and took a major step back to pre-pandemic life.

Government spending increased 1.1% due to increased budget spending to deal with the pandemic.
However, exports, which account for half of South Korea’s economy, shrank 3.1% in the most recent quarter, compared to a 3.6% increase in the first quarter quarter-on-quarter.

South Korea’s export growth showed signs of losing momentum amid rising foreign economic uncertainty due to the prolonged war between Russia and Ukraine and China’s blockade of COVID-19.

In May’s latest forecast, BOK predicted that the South Korean economy would grow 2.7% this year and inflation would rise 4.7%.

In June, the government lowered its 2022 economic growth outlook to 2.6% and significantly raised its inflation outlook this year to 4.7%, the highest in 14 years. (Yonhap News Agency)

 

Credit/Source : KoreaTimes

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