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(KPL/Xinhua) South Korea's gross domestic product (GDP) recorded the first contraction in six quarters due to faltering consumption and investment, central bank data showed Thursday.
(KPL/Xinhua) South Korea's gross domestic product (GDP) recorded the first contraction in six quarters due to faltering consumption and investment, central bank data showed Thursday.
The seasonally adjusted real GDP, adjusted for inflation, contracted 0.2 percent in the April-June quarter compared with the previous quarter after expanding 1.3 percent in the January-March quarter, according to the Bank of Korea (BOK).
It marked the first reduction since the fourth quarter of 2022 on the back of sluggish consumption and investment.
Export, which accounts for about half of the export-driven economy, rose 0.9 percent in the second quarter, slower than an increase of 1.8 percent in the first quarter.
Import gained 1.2 percent in the second quarter on solid demand for oil products and crude oil after shrinking 0.4 percent in the previous quarter.
Private consumption, another growth engine of the Asian economy, declined 0.2 percent in the second quarter from three months earlier, posting the first fall in four quarters.
The downturn was attributed to weaker demand for automobiles and clothing.
Construction investment diminished 1.1 percent in the second quarter amid the housing market slump after soaring 3.3 percent in the previous quarter.
Fiscal spending added 0.7 percent, but facility investment retreated 2.1 percent on lower demand for semiconductor equipment, keeping a downward trend for the second consecutive quarter.
Uncertainties lingered over the South Korean economy as geopolitical risks in the Middle East and Europe increased volatility in the won/dollar exchange rate.
The real estate market remained sluggish on high borrowing costs. The central bank had left its key rate unchanged at 3.50 percent since January last year after hiking it by 3.0 percentage points for the past one and a half years.
By industry, the seasonally adjusted production in the manufacturing sector grew 0.7 percent in the second quarter on a quarterly basis.
Production in the service industry stood unchanged in the second quarter compared with the previous quarter, but output in the construction segment tumbled 5.4 percent.
Output in the agricultural, livestock and fishery industry rose 5.4 percent in the second quarter, faster than a growth of 1.8 percent in the first quarter.
Real gross domestic income dipped 1.3 percent in the April-June quarter, marking the first fall since the third quarter of 2022.
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