South Korea’s economy grew at a slightly slower 0.9 per cent in the fourth quarter of last year, as falling construction investments offset a rise in exports, state data showed on Thursday.
Gross domestic product rose a seasonally adjusted 0.9 per cent from October-December compared to the previous quarter’s gain of 1.1 per cent, the central Bank of Korea (BOK) said.
On-year, however, the economy expanded 3.9 per cent — the fastest pace in nearly three years and topping the third quarter’s 3.3 per cent increase.
“Construction investment dropped while exports rebounded, consumer spending showed a steady rise and corporate infrastructure investments accelerated,” the central bank said in a statement.
Construction investments shrank 3.8 per cent from three months earlier as real estate markets cooled, dampening demand for buildings and other construction projects.
Consumer spending, which had unexpectedly shrank 0.4 per cent in January-March 2013, grew by 0.7 per cent and 1.0 per cent in the following two quarters and climbed 0.9 per cent in October-December.
Exports, which account for nearly half of the country’s economy, rose 2.0 per cent compared to the previous quarter when they shrank 1.3 per cent. On year, exports were up 5.5 per cent.
Overseas shipments of cars, auto parts and petrochemical products fuelled the export rebound, the central bank said.
Investments in corporate infrastructures also jumped 6.4 per cent from the previous quarter, as businesses spent more to build or upgrade production machinery, the BOK said.
For the whole of 2013, Asia’s fourth-largest economy expanded 2.8 per cent, up from 2.0 per cent posted in 2012 and in line with government forecasts.
The central bank has forecast 3.8 per cent growth in 2014, boosted by the government’s stimulus spending and improving overseas markets.
The South’s export-reliant economy was hit badly by slowing demand from major markets including the US and Europe during the global slowdown.
But its overseas shipments hit a record high of $559.72 billion in 2013 on a general pickup in global demand.
The International Monetary Fund on Tuesday lifted its 2014 global growth forecast to 3.7 per cent compared to 3.6 per cent predicted earlier, citing stronger growth in the US and eurozone.
Source : Channel News Asia | January 23, 2014