South Korea's third-quarter growth slips
Spending slump and trade frictions lead to lower than expected figures
South Korea’s economic growth has slowed more than expected because of a domestic spending slump and intensifying global trade frictions.
The Bank of Korea's advance estimates showed that the economy grew 0.4 per cent during July to September, down from a 1 per cent rise in the second quarter. The expectation was that South Korea would see a 0.5 per cent growth quarter-on-quarter and 2.1 per cent year-on-year.
Overseas trade is vital to its prosperity so the impacts of the US-China trade spat, along with its own dispute with Japan, will filter through to the national figures.
Even so, exports rose 4.1 per cent during the quarter, an improvement on the 2.0 per cent increase during the second quarter. That rise had reversed a successive run of two quarter contractions.
The South Korean government has tried to boost growth via spending and by the central bank bringing interest rates down to record lows.
Although exports showed some signs of recovery, Reuters reported, the overall outlook was clouded. The country’s major electronics exporters continued to face headwinds from a global economic slowdown.
Economic growth across Asia is set to slow more than expected, according to the latest projections by the International Monetary Fund. In its Regional Economic Outlook report, the IMF said growth in Asia could moderate to 5 per cent in 2019, and 5.1 per cent in 2020. These are both lower than its previous projections.