South Korea’s economy recorded its strongest growth in more than five years in the second quarter as increased government spending and record low interest rates insulated it from the global recession.
Asia’s fourth-largest economy expanded 2.3 percent quarter-on-quarter in the three months ended June 30, the Bank of Korea said yesterday in a report.
South Korea joins Singapore and China among the Asian nations that have released stronger growth figures in recent weeks — another sign the region is emerging from the world’s worst downturn in decades.
There are doubts, however, whether South Korea and Asia’s upturn will be sustained once the effects of government pump priming wear off.
Kang Chang-ku, an economist at the central bank, said the last time GDP grew more was in the fourth quarter of 2003 when it expanded 2.6 percent. The second quarter figures are preliminary and may be revised.
The expansion marked the second straight quarter of growth for Asia’s fourth-largest economy after a contraction in the final quarter of last year.
It eked out a 0.1 percent gain quarter-on-quarter in the first quarter after a contraction of 5.1 percent in the previous quarter.
But the result was not all good news and showed that some fragility remains.
For example, when compared with the same period last year, South Korea’s economy shrank 2.5 percent. That marked the third straight quarter of year-on-year shrinkage.
The last time that happened was in 1998, when GDP contracted from the previous year in all four quarters, said Kang, the central bank economist.
Kwon Goohoon, an economist at Goldman Sachs in Seoul, said in a note that South Korea’s growth was “driven by a good mix of strong fiscal stimulus, a weak KRW [South Korean won] and monetary easing.”
He expressed doubt, however, that such a strong performance would be repeated the rest of the year as fiscal stimulus wanes and credit expansion slows.
FREEDOM OF NAVIGATION: The UK would continue to reinforce ties with Taiwan ‘in a wide range of areas’ as a part of a ‘strong unofficial relationship,’ a paper said The UK plans to conduct more freedom of navigation operations in the Taiwan Strait and the South China Sea, British Secretary of State for Foreign, Commonwealth and Development Affairs David Lammy told the British House of Commons on Tuesday. British Member of Parliament Desmond Swayne said that the Royal Navy’s HMS Spey had passed through the Taiwan Strait “in pursuit of vital international freedom of navigation in the South China Sea.” Swayne asked Lammy whether he agreed that it was “proper and lawful” to do so, and if the UK would continue to carry out similar operations. Lammy replied “yes” to both questions. The
SECOND SPEECH: All political parties should work together to defend democracy, protect Taiwan and resist the CCP, despite their differences, the president said President William Lai (賴清德) yesterday discussed how pro-Taiwan and pro-Republic of China (ROC) groups can agree to maintain solidarity on the issue of protecting Taiwan and resisting the Chinese Communist Party (CCP). The talk, delivered last night at Taoyuan’s Hakka Youth Association, was the second in a series of 10 that Lai is scheduled to give across Taiwan. Citing Taiwanese democracy pioneer Chiang Wei-shui’s (蔣渭水) slogan that solidarity brings strength, Lai said it was a call for political parties to find consensus amid disagreements on behalf of bettering the nation. All political parties should work together to defend democracy, protect Taiwan and resist
By refusing to agree spending increases to appease US President Donald Trump, Spanish Prime Minister Pedro Sanchez threatened to derail a summit that NATO Secretary-General Mark Rutte needs to run smoothly for the sake of the military alliance’s future survival. Ahead of yesterday’s gathering in The Hague, Netherlands, things were going off the rails. European officials have expressed irritation at the spoiler role that Sanchez is playing when their No. 1 task is to line up behind a pledge to raise defense spending to 5 percent of GDP. Rutte needed to keep Spain in line while preventing others such as Slovakia
SHIFT PRIORITIES: The US should first help Taiwan respond to actions China is already taking, instead of focusing too heavily on deterring a large-scale invasion, an expert said US Air Force leaders on Thursday voiced concerns about the Chinese People’s Liberation Army’s (PLA) missile capabilities and its development of a “kill web,” and said that the US Department of Defense’s budget request for next year prioritizes bolstering defenses in the Indo-Pacific region due to the increasing threat posed by China. US experts said that a full-scale Chinese invasion of Taiwan is risky and unlikely, with Beijing more likely to pursue coercive tactics such as political warfare or blockades to achieve its goals. Senior air force and US Space Force leaders, including US Secretary of the Air Force Troy Meink and