S. Korea Growth Slides to 2.6%
World Economy

S. Korea Growth Slides to 2.6%

The ailing South Korean economy grew 2.6% in 2015, the lowest in three years, largely due to slumping exports and manufacturing, the central bank said Tuesday.
The nation’s fourth-quarter gross domestic product rose 0.6% from the previous three months, according to the Bank of Korea’s preliminary report, Yonhap reported.
“Private spending and investment in the construction sector expanded at a fast rate in 2015 and growth in facility investment was steady, but the exports and investment in intellectual property products were much slower,” the BOK said.
South Korea’s gross domestic product growth marked 3.3% in 2014, 2.9% in 2013 and 2.3% in 2012.
The annual export growth fell to 0.4% from 2.8% in 2014 and 4.3% the year before. Growth in IP product investment fell to 1.4%, considerably lower than 4.6% in 2014 and 4.4% in 2013.
Private consumption grew 2.1%, up from the 1.8% in the previous year. Construction investments grew 4%, a large leap from the 0.6% growth from a year ago.
By economic activities, growth in manufacturing also slipped from 4% to 1.4% and services from 3.1% to 2.8%. Growth in the agriculture and fishing sector swung to minus 0.6% from 2.6% the previous year.
The country’s real gross domestic income–used to gauge economic activity based on income–grew 6.4%, by far surpassing GDP growth, largely as record-low global oil prices led to improvements in trade conditions.
As regards the fourth quarter, the central bank said that private consumption accelerated and export growth swung back to positive, yet the considerable fall in construction investments pulled down the overall quarterly growth.
In the October-December period, construction investments plummeted to minus 6.1% on-quarter from 5%. Facility investment was halved to 0.9% on-quarter from 1.8%.
During the same period, private consumption grew 1.5% from a quarter ago. Exports grew 2.1% from minus 0.6% and imports grew 2.8%.
The report came after the central bank on Dec. 14 slashed its growth outlook for 2016 to 3% from 3.2%, citing soaring household debt, volatility in the China market and low crude oil prices.


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