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South Korea’s economy grows 0.3% in Q2, misses estimates

by ChemOrbis Editorial Team -
  • 24/07/2015 (11:37)
According to data released by South Korea’s central bank, the Bank of Korea (BOK), the country’s economy slowed in the second quarter, posting a growth rate of 0.3% on a quarterly basis following a growth rate of 0.8% in the first quarter. The deceleration in the economy was attributed to an increased number of MERS cases, weak exports and drought conditions in some parts of the country.

The BOK reported that an increased number of MERS cases negatively affect consumer spending as people refrained from heading to crowded areas like shopping centers.

On a yearly basis, meanwhile, South Korea’s economy expanded 2.2% in the April- June period compared with a growth rate of 2.5% in the first quarter. The data also showed that private consumption declined 0.3% while facility investment and construction investment rose 0.4% and 1.7%, respectively. Exports edged up 0.1% on a quarterly basis in the second quarter while on a yearly basis, exports fell for a sixth consecutive month in June. Growth in service industry production, meanwhile, slowed to 0.1% in the second quarter after expanding 0.9% in the previous quarter.

South Korea’s Q2 growth rate also missed the BOK’s growth forecasts, which called for a growth rate of 0.4% in the second three months. In June, the bank cut its growth forecast for 2015 to 2.8% from the previously estimated growth rate of 3.1% while it kept its inflation estimate stable at 0.9%.
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