South Korea's economic growth slowed in the first quarter from three months earlier due to still sluggish demand at home and abroad, central bank data showed Thursday.
In the January-March period, the country's gross domestic product expanded 0.5 percent from the previous quarter, slowing from a 0.7 percent on-quarter expansion three months earlier, according to preliminary data from the Bank of Korea.
(Yonhap)
The latest reading marks a slight increase from an earlier estimate of 0.4 percent on-quarter expansion released in April.
From a year earlier, the local economy grew 2.8 percent, on par with the BOK's growth outlook for 2016.
Consumer spending contracted 0.2 percent from three months earlier, while exports also dwindled 1.1 percent over the cited period.
South Korea's exports have fallen every single month since the start of 2015.
"A rise in the government's spending and construction investments helped revise up the quarterly GDP growth by 0.1 percentage point," said Kim Young-tai, director of the BOK's national accounts division. "For the second quarter, we expect better performance in domestic consumption on the back of the brisk sales of cars and the effects of the temporary holidays in May."
The South Korean government earlier extended an excise tax cut program for passenger cars until June and designated an extra holiday on May 6 to give a four-day break, including the weekend, as a way to bolster domestic demand and the entire economy.
According to recent industry data, sales of the country's five automakers rose 6.4 percent in May from a year earlier.
Separate data also showed that during the temporary holiday period, sales of local department stores and duty-free shops vaulted 16 percent and 19.2 percent, respectively.
The BOK said construction investment gained 6.8 percent on-quarter in the January-March period, but facility investment plunged 7.4 percent over the cited period.
The construction industry helped keep the local economy growing, with its output jumping 11.1 percent on-year in the first three months.
Output by the manufacturing industry, on the other hand, only gained 1.9 percent over the cited period, while that by the agricultural industry shrank 2.4 percent.
The service industry expanded 2.5 percent on-year in the January-March period.
Meanwhile, the BOK said the country's gross national income grew 2.7 percent from three months earlier in the first quarter, marking a turnaround from a 0.6 percent on-quarter drop in the previous quarter. (Yonhap)