South Korea’s economic growth slowed in the third quarter. This is because sluggish domestic consumption due to South Korea’s strict Covid regulations offset the strong exports.
Gross domestic product rose 0.3% between July and September compared to the second quarter, below the 0.6% growth forecast in a Reuters survey. The economy grew at 0.8% in the second quarter.
Third-quarter exports increased 1.5% from the previous three months, while consumer spending fell 0.3%.Analysts, however, said the economy would probably regain momentum thanks to the country’s rapid pace. Deployment of vaccination..
Data weaker than expected for Asia’s fourth-largest economy was consistent with China’s economic woes and global supply chain bottlenecks.
Bank of Korea warned: China’s energy crisis and debt crisis The real estate market also brought risks to the Korean economy. A 1 percentage point slowdown in China was estimated to reduce the growth rate of small countries by 0.1 to 0.2 percentage points.
South Korea’s economy expanded 4.0% compared to the same period last year, slowing sharply from 6.0% growth in the second quarter, which was the fastest in 10 years.
After the country suffered the worst outbreak of Covid-19 and more than 1,000 daily infections, it was widely expected that growth would decline in the third quarter. However, BoK said consumption is expected to recover in the fourth quarter, helped by increased vaccination and the transition to “living with Covid.”
President Moon Jae-in announced on Monday a three-step plan to “gradually return to normal life” by February next year. Over 70% of the country’s 51 million population is fully vaccinated.
The plan will ease virus containment measures, including 24-hour restaurants and cafes starting next month, and a social gathering for up to 10 people.
Alex Holmes, Asia Economist at Capital Economics, said: “BoK will not be discouraged from being further tightened by today’s data.”
Lee Ju-yeol said that the central bank will be in South Korea in August. The first Asian economy to tighten monetary policy Since the pandemic occurred. The central bank plans to raise the benchmark interest rate by 25 basis points to 1% on November 25, as both inflation and household debt will rise.
The central bank forecasts 4% growth this year, supported by strong exports. According to customs data, overseas shipments during the first 20 days of October increased by 36.1% year-on-year.
Krystal Tan, ANZ Economist, said: “Nevertheless, we do not expect the momentum to slow significantly as the economy continues to open and fiscal support continues until 2022.”
Covid outbreak buffet Korean growth
Source link Covid outbreak buffet Korean growth