Korea's GDP grows 2.9% in second quarter on year

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Korea's GDP grows 2.9% in second quarter on year

Published: 01 Sep. 2022, 16:20

A store in Myeong-dong in central Seoul prepares to open its doors on Aug. 30. [YONHAP]

Korea’s economy grew 2.9 percent in the second quarter on year, unchanged from the July estimate.

This was slightly lower than the 3.0 percent GDP growth in the first quarter, according to the central bank’s preliminary data Thursday.

The quarterly growth on the expenditure side was led by strong private spending, which increased 3.9 percent on year, centered on non-durable goods like apparel and shoes, said the central bank. Government spending grew 3.7 percent in the same period.

“Private spending's growth centered on individual services and non-durable goods like apparel and shoes following the lifting of social distancing restrictions,” said a spokesperson for the Bank of Korea.

Facility investment fell 6.6 percent and construction investment dropped 3.7 percent as specialized construction decreased despite an increase in building construction.

Exports grew 4.6 percent and imports rose 1.5 percent.

Services grew 4.3 percent on year, with increases in accommodation and food services, transportation and storage and cultural and other services.

The central bank projected the economy to be able to reach the goal of annual 2.6 percent growth, if the GDP continues to increase between 0.1 and 0.2 percent in the third and fourth quarters from the previous quarters.

The GDP grew 0.7 percent in the second quarter from the previous quarter, also matching the advance estimate released earlier.

Gross national income (GNI) was down 1.1 percent from the same period a year earlier, attributed by the rapid fall in the value of the won against the U.S. dollar.

“Net factor income in the rest of the world decreased and the terms of trade worsened, despite an expansion of GDP,” said the central bank in a statement.

Compared to the previous quarter, the GNI was down 1.3 percent.

“Growth is projected to weaken as export slowdown expands from the slowdown in the global economy caused by the Ukraine war and the rise of interest rates in key countries,” said the spokesperson. But private spending is expected to “continue to gradually recover from a continued [effort to] return to normal.”

BY JIN MIN-JI [[email protected]]