Thu, Jul 28, 2011 - Page 10 News List

South Korea’s economy slows in second quarter


South Korea’s economic growth slowed in the second quarter from three months earlier, the central bank said yesterday.

Export gains eased sharply due partly to global economic uncertainties, the central bank said.

Asia’s fourth-largest economy grew 0.8 percent quarter-on-quarter between April and last month compared to a 1.3 percent expansion between January and March, according to an advance estimate from the Bank of Korea.

GDP rose 3.4 percent in the second quarter from a year earlier, slowing down from a 4.2 percent annual increase between January and March.

“Private consumption steadily increased and facilities investment rose, but growth in exports slowed while construction investment remained sluggish,” the central bank said in a statement.

Yesterday’s figures showed that exports, which account for about half of South Korea’s GDP, rose 1.8 percent in the second quarter from the previous quarter, slowing from a 3.3 percent increase between January and March.

The fall came amid growing global uncertainty sparked by the eurozone debt crisis and a possible US debt default.

The second-quarter performance was slightly below the central bank’s initial estimate early this month and the market’s expectations.

However, the bank said growth is likely to pick up to 1.5 percent in both the third and fourth quarters.

That indicates the economy remains on a robust recovery track.

“Exports of tech products remained weak last quarter mainly because prices of flat panel and chips have not yet recovered,” said Kim Young-Bae, director general of its economic statistics division.

“The pace of overseas shipments slowed down but as the level of exports remained sound overall, it would be hard to say that exports stay weak,” Kim said.

Kim stuck by the bank’s full-year growth forecast of 4.3 percent growth, while the finance ministry’s prediction is 4.5 percent.

GDP grew 6.2 percent last year, which was the fastest rate in eight years.

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