Second quarter GDP growth revised up 0.1 points to 6% on year

Finance

Published: 02 Sep. 2021, 15:53 Updated: 02 Sep. 2021, 18:22

Second quarter GDP growth revised up 0.1 points to 6% on year

Bank of Korea's headquarters in central Seoul [YONHAP]

Korea’s economy grew by 6 percent on year in the second quarter this year, slightly faster than earlier projections, as exports and consumer and government spending were strong.

According to a revised estimate on the country’s gross domestic product (GDP) released by the Bank of Korea Thursday, second quarter GDP grew by 6 percent on year, 0.1 percentage points higher than an earlier projection by the bank in July.

On quarter, the second quarter GDP grew by 0.8 percent, also up by 0.1 percentage points compared to the bank's earlier estimate.

Exports jumped by 22.4 percent on year in the second quarter, which is the highest figure since the first quarter of 2011. On quarter, exports fell by 2 percent.

Private consumption in the quarter grew by 3.7 percent on year, which is the fastest growth since the 4 percent growth recorded in the first quarter of 2018. On quarter, private consumption grew by 3.6 percent, which is the highest since 3.6 percent recorded in the second quarter of 2009.

Government spending rose 5.3 percent on year, the highest figure since the second quarter of 2020. On quarter, government spending grew by 3.9 percent, which is the highest since 4.2 percent recorded in the second quarter of 1987.

Manufacturing grew 13.5 percent on year, and service expanded by 4.4 percent. Construction contracted 3.4 percent and agriculture, forestry and fishing by 2.4 percent.

The stronger-than-expected growth in the second quarter is expected to make it easier for the country to reach its 4 percent annual growth target.

“Based on our previous data, the country had to post around 0.7 percent on quarter growth in the third and fourth quarter to achieve our annual target of 4 percent growth,” said Shin Seung-cheol, director of the national accounts division at the central bank during a briefing held Thursday. “With the revised estimate, the following quarters need only to grow at around 0.6 percent compared to the previous quarters. It’s a more achievable target.”

While the pandemic remains a threat to the country’s economic growth, the central bank’s governor expressed confidence that the country will maintain robust growth throughout the year.

“Despite recent spread of the Delta variant, we expect to see robust recovery backed by expanded vaccinations and strong export growth,” Bank of Korea Gov. Lee Ju-yeol said Thursday.

Real gross national income increased by 6.1 percent on year in the April-June quarter to 474.2 trillion won ($408.5 billion). The GDP deflator, which measures the changes in prices of goods and services produced in an economy, grew by 1.6 percent on year in the second quarter.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]