South Korea’s economic growth slows in first quarter
By Kwanwoo Jun
South Korea’s economic growth slowed in the first quarter as pandemic-related restrictions weighed on private consumption and investment.
Gross domestic product rose 0.7% in the January-March period from the previous quarter, slower than a revised 1.2% expansion for the fourth quarter of 2021, preliminary data showed on Tuesday. the Bank of Korea.
The latest reading – above market forecasts of 0.6% quarter-on-quarter growth – showed private consumption and construction investment contracted and equipment investment fell further, while that exports maintained solid growth on demand for semiconductors and chemicals.
Year-on-year, the economy grew 3.1% in the first quarter after the revised growth of 4.2% in the previous quarter.
This beat market forecasts of a 2.8% year-on-year expansion for the first quarter.
Consumer spending in South Korea could rise in the second quarter as the government in April scrapped most Covid-19 social distancing restrictions as the spread of the omicron variant slowed. The export-driven economy still faces challenges from war in Ukraine and Chinese lockdowns, which are exacerbating global supply chain disruptions, analysts said.
Last week, the International Monetary Fund cut its 2022 growth forecast for South Korea to 2.5% from 3%.
The Bank of Korea expects the country’s GDP growth to be lower than its earlier forecast of 3% for this year.
Write to Kwanwoo Jun at [email protected]