South Korea posted its lowest economic growth in five quarters in the three months to March, the central bank said yesterday, blaming slow consumer spending.
The Bank of Korea said GDP grew 0.8 percent quarter-on-quarter for the January-March period, slightly up from the 0.7 percent it projected earlier.
The revised figure marks the slowest expansion since the fourth quarter of 2006 when growth also stood at 0.8 percent, the bank said.
The bank said GDP growth was 5.8 percent year-on-year in the first quarter, up from its previous estimate of 5.7 percent.
The economy expanded faster than earlier estimated on brisk exports, but falling real income and rising inflation dampened demand at home, it said.
The country’s real gross national income, which reflects the population’s actual purchasing power, dipped 1.2 percent in the first quarter — the biggest drop since the first quarter of 2003, it said.
The nation’s inflation also hit the highest level in almost seven years last month on increased fuel costs, breaching the target range for the sixth straight month, official data showed.
The consumer price index jumped 4.9 percent last month from a year earlier, the highest rise since a 5 percent gain in June 2001, the National Statistical Office said.
The Bank of Korea predicts inflation is likely to stay far above its target this year because of high oil prices and a weak won.
The bank’s inflation target range is 2.5 percent to 3.5 percent for this year. But annual inflation has been above 3.5 percent since December.
In better news, South Korea posted a trade surplus of more than US$1 billion last month to end a run of deficits, helped by a surge in exports of ships, the government said yesterday.
The trade surplus reached US$1.04 billion last month as export growth offset a soaring oil import bill, the official figures showed. The trade balance was in deficit to the tune of US$190 million in April.
Exports surged 27.2 percent year-on-year to US$39.49 billion last month.
Shipbuilders enjoyed record sales of US$4.9 billion last month and other exporters also benefited from a weaker won, the Ministry of Knowledge Economy said in a statement.
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
Taiwan will prioritize the development of silicon photonics by taking advantage of its strength in the semiconductor industry to build another shield to protect the local economy, National Development Council (NDC) Minister Paul Liu (劉鏡清) said yesterday. Speaking at a meeting of the legislature’s Economics Committee, Liu said Taiwan already has the artificial intelligence (AI) industry as a shield, after the semiconductor industry, to safeguard the country, and is looking at new unique fields to build more economic shields. While Taiwan will further strengthen its existing shields, over the longer term, the country is determined to focus on such potential segments as
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
RSS