S. Korean Economy Backtracks 0.3% in Q1, Worst Since 2008

Write : 2019-04-25 10:40:48 Update : 2019-04-25 19:05:29

S. Korean Economy Backtracks 0.3% in Q1, Worst Since 2008

Anchor: The South Korean economy is estimated to have backtracked point-three percent in the first quarter from the previous three months due to sluggish exports and investment. It was the lowest growth in a decade. 
Albert Kim has more. 

Report: The Bank of Korea reported on Thursday that the country’s gross domestic product is estimated to have shrunk point-three percent in the first three months of 2019. 

It is the lowest growth since the fourth quarter of 2008 when the economy contracted three-point-three percent in the aftermath of the global financial crisis. It is also the first negative growth since the fourth quarter of 2017 when the economy shrank point-two percent.

Compared with the January-March period of last year, the economy expanded one-point-eight percent, which is the lowest amount since the third quarter of 2009.

Behind the contraction are falling exports and a drop in investment. The country’s exports decreased two-point-six percent on-quarter, while imports fell three-point-three percent. In particular, exports dropped in electronics goods such as liquid crystal displays, while imports of machinery, crude oil and natural gas fell steeply. 

Facility investment dropped ​ten-point-eight percent on-quarter in the first quarter, which is the worst figure since the 24-point-eight percent contraction in the first quarter of 1998 when the country suffered from the Asian financial crisis. Plunging investment in semiconductor manufacturing equipment and transportation equipment pulled down the figure. 

According to the central bank, the high "base effect" worsened the numbers as huge government spending in the fourth quarter of last year made this year's first quarter figures look worse. 

Private and government spending grew point-one and point-three percent respectively on-quarter, somewhat offsetting the sluggish growth.

On Wednesday, the South Korean government approved a six-point-seven trillion won, or five-point-eight billion dollar, supplementary budget, which it expects will pull up economic growth by point-one percentage point this year.
Albert ​Kim, KBS World Radio News.

[Photo : YONHAP News]

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