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S.Korea's GDP stays below 1 pct for 2 quarters
 

South Korea's economic growth stayed below 1 percent for two quarters through the third quarter on lower corporate investment that offset an increase in export and private consumption, central bank data showed on Tuesday.

Real gross domestic product (GDP) adjusted for inflation, amounted to 400.2 trillion won (360.8 billion U.S. dollars) in the July-September quarter, up 0.6 percent from the previous quarter, according to the Bank of Korea (BOK).

It was the identical growth rate with the second quarter, after expanding 1 percent in the first quarter.

Corporate investment weakened especially in the construction sector as the government unveiled a set of measures to control speculative investment in the real estate market.

Investment in the construction industry tumbled 6.7 percent in the third quarter from the previous quarter.

Facility investment shrank 4.4 percent during the quarter on soft demand for machinery, of which investment dipped 9.5 percent. Investment in the semiconductor sector, which had led the overall corporate investment, came to a halt in the third quarter.

Private consumption rose 0.5 percent on demand for semi-durable goods such as clothing and non-durable goods.

Fiscal spending expanded 1.5 percent in the September quarter on an increased benefits of public health insurance.

Export, which accounts for about half of the export-driven economy, advanced 3.9 percent in the quarter, but import inched down 0.7 percent.

The BOK expected the South Korean economy to expand 2.7 percent in 2018. For the first nine months of this year, the real GDP grew 2.5 percent compared with the same period of last year.

To meet the BOK's growth outlook, the real GDP was required to increase at least 0.84 percent in the fourth quarter on a quarterly basis.

To boost private consumption, the government lowered a consumption tax for automobile and a fuel tax for gasoline and diesel, but the economy was faced with negative risk factors.

The BOK raised its benchmark interest rate from 1.50 percent to 1.75 percent in late November, increasing borrowing costs for both households and companies.

It would weigh down on corporate investment and debt-servicing burden for households, which had rushed to buy new home with borrowed money.

By industry, production among manufacturers gained 2.3 percent in the third quarter from the prior quarter, logging the highest in a year.

The construction sector's production plunged 5.7 percent in the September quarter.

Output in the services industry rose 0.5 percent on expansion in the health and social welfare services sectors.

Real gross national income (GNI), which measures a combined income at home and abroad by people of a country, increased 0.7 percent in the third quarter from three months earlier.


(www.chinaview.cn 2018-12-05)
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