Growth stalls to three-year low in Q3

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Growth stalls to three-year low in Q3

The economy grew at the slowest pace in more than three years in the third quarter on faltering facility investment, the central bank said yesterday, raising chances that full-year growth will likely miss the bank’s 2.4 percent estimate.

Korea’s GDP grew a revised 0.1 percent in the July-September period from three months earlier, down from a previous estimate of 0.2 percent, according to the Bank of Korea.

The third-quarter growth marked the slowest gain since the first quarter of 2009 when Korea was in the midst of the 2008 global financial crisis. It also slowed from a 0.3 percent on-quarter gain in the second quarter.

The country’s GDP grew a revised 1.5 percent from a year earlier in the third quarter, the slowest expansion since a 1 percent on-year gain in the third quarter of 2009.

The BOK said fourth-quarter growth is not likely to see a contraction as exports remain at a similar level but that it will be difficult for Asia’s fourth-largest economy to meet the BOK’s full-year estimate of 2.4 percent.

“To meet the BOK’s 2012 growth forecast, growth should reach 1.6 percent in the fourth quarter,” Jung Yung-taek, the head of the BOK’s national accounts division, said at a press conference.

Korea saw almost no on-quarter change in the third quarter, spawning concerns that the economy is entering a phase of low growth, analysts say.

The BOK said earlier that quarterly growth will pick up at the end of the year, but the growth pace will stay below 1 percent until the first half of next year.

Korea’s exports and domestic demand remain weak amid the prolonged global economic slowdown.

Yonhap

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