Growth outlook for Korea by OECD dips
Korea’s economy grew at a slower pace than that of the United States and Japan in the second quarter of this year, a report by the Organization for Economic Cooperation and Development (OECD) showed Sunday.
The Paris-based organization said the country’s seasonally adjusted gross domestic product (GDP) advanced 0.6 percent compared to the first quarter in the April-June period. This is slower than the 1 percent tallied for the United States and 0.7 percent for Japan.
The numbers come as the growth rate of Asia’s fourth-largest economy outpaced that of Washington and Tokyo in the first quarter of 2018. In January-March, Korea’s GDP moved up 1 percent compared to a 0.5 percent gain for the U.S. and minus 0.2 percent posted by Japan.’
The OECD said that Seoul’s number in the second quarter also trailed that of the 20 industrialized and developing economies, which pulled off 1 percent growth. It added that the average growth for OECD nations edged past that of South Korea at 0.7 percent in the three-month period.
It attributed the drop to the weakening of investment and sluggishness in the country’s key industries in recent months.
The Bank of Korea (BOK) said earlier that manufacturing sector growth stood at just 0.6 percent, down 1 percentage point from the first three months of this year, while construction actually contracted 3.1 percent on-quarter. In the first three months, the construction industry expanded 2.1 percent.
Reflecting the poorer showing, the OECD said in its Interim Economic Outlook report that Korea may be able to grow 2.7 percent this year and 2.8 percent in 2019. This is down 0.3 percentage points from its estimate for 2018 released in May, and 0.2 percentage points from the forecast for next year.
The downgrade is in line with moves by other international organizations such as the Asian Development Bank, which adjusted down Korea’s GDP growth estimate to 2.9 percent from 3 percent and next year’s numbers to 2.8 percent from 2.9 percent.
The BOK too said in July that Seoul will likely grow 2.9 percent this year, down from the 3 percent which it said was possible earlier.