Korea’s Q2 GDP gain confirmed at 0.7%, real gross income down on KRW plunge
South Korea’s second-quarter economy was confirmed to have grown 0.7% quarter-on-quarter, but a contraction in exports coupled with deteriorating sentiment in the heavily indebted private sector due to the rapid rise interest rates and inflation, painting a bleak outlook for the economy.
Seasonally-adjusted real gross domestic product (GDP) reached 491.9 trillion won ($364 billion), up 0.6 percent quarter-on-quarter and 2.9 percent year-on-year, both unchanged from preliminary data for July, the Bank of Korea said Thursday.
Real gross national income fell 1.3 percent quarter-on-quarter and 1.1 percent year-on-year to 468.4 trillion won due to the sharp decline in the Korean won against the US dollar. Real gross domestic income also fell 1.1% quarter-on-quarter and 0.6% year-on-year due to deteriorating trade conditions due to higher imports.
The only upside of the data is private consumption which gained 2.9% quarter on quarter and 3.9% year on year thanks to the full lifting of Covid-19 social restrictions.
Investment in facilities edged up 0.5% from the previous quarter which saw a contraction of 3.9% while plunging 6.6% year on year. Construction investment rose just 0.2% in the quarter and fell 3.7% year on year.
Public spending increased by 0.7% over one quarter and 3.7% over one year on the supplementary budget.
Exports fell 3.1% in the quarter, higher than the 1.0% drop in imports.
The gross savings rate reached 34.2%, down 1.5 percentage points from the previous quarter, while the gross investment rate added 1.7 percentage points to 32.3%.
By Cho Jee Hyun
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