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Roundup: S.Korea's economic growth stays below 1 pct for 4 quarters

Xinhua, April 23, 2015 Adjust font size:

South Korea's economic growth stayed below 1 percent for four straight quarters due to the sluggishness in exports and private consumption, boosting worries about a prolonged trend of low growth, central bank data showed Thursday.

Real gross domestic product (GDP) increased 0.8 percent in the first quarter from three months earlier, according to the Bank of Korea (BOK). It was roughly in line with the BOK's growth outlook and market expectations.

The BOK revised down its 2015 growth outlook to 3.1 percent in March from 3.4 percent estimated three months earlier. It was far lower than the government's growth forecast for 2015 at 3.8 percent.

After rebounding to 1.1 percent in the first quarter of 2014, the real GDP growth stayed below 1 percent, with 0.5 percent in the second quarter of 2014, 0.8 percent in the third quarter and 0. 3 percent in the fourth quarter.

From a year earlier, the real GDP expanded 2.4 percent in the first quarter, the lowest in two years.

The slow growth came amid the sluggishness in both exports and private consumption, boosting worries that the South Korean economy might fall into the prolonged trend of low growth.

The cheaper oil reduced production costs of companies, lowering living costs for households, but the weakened sentiment among consumers prevented the economy from getting back on the recovery track.

Private consumption rose 0.6 percent in the first quarter from the prior quarter. Growth in facility investment sank from 4 percent in the fourth quarter of 2014 to zero in the first quarter.

Construction investment surged 7.5 percent in the first quarter, marking the highest growth in about 14 years and turning around from a 7.8 percent reduction in the fourth quarter of last year.

Exports, which account for around half of the economy, were unchanged in the first quarter compared with the prior quarter due to weak demand for locally-made automobiles and display panels.

Import growth slid from 0.7 percent in the fourth quarter of last year to 0.5 percent in the first quarter, indicating the faltering domestic demand.

On the production front, output among manufacturers increased 0. 4 percent on-quarter in the first quarter. Those in the construction sector expanded 2.5 percent, but production in the electricity, tap water and gas declined 3.6 percent. Service industry production rose 0.9 percent.

Gross domestic income (GDI), which gauges all income earned while producing goods and services, advanced 3.6 percent in the first quarter from three months earlier, marking the highest growth in about six years. The figure represents the real purchasing power of final products. Endi