South Korea's economy shrank at a faster rate in the first quarter than earlier expected, the central bank said Tuesday, due to sluggish investment and exports that are expected to further deteriorate on escalating trade tension between the world's two largest economies.
The country's real gross domestic product backtracked 0.4 percent in the first quarter of the year from three months earlier, the Bank of Korea said.
The latest revision is lower than the central bank's earlier estimate of a 0.3 percent contraction made in April.
(Yonhap)
From the same period last year, the country's GDP expanded 1.7 percent, again 0.1 percentage point lower than the 1.8 percent earlier estimated.
The on-quarter contraction was largely attributed to a dip in manufacturing output, which plunged 3.3 percent on decreases in production of computers, electronics and optical equipment, the bank said.
Exports also dipped 3.2 percent on-quarter in the January-March period, and business spending also plummeted 9.1 percent over the cited period, according to the BOK.
South Korea's exports have been falling for six consecutive months as of May, with its shipments to China, the world's single largest importer of South Korean goods, dipping for seven consecutive months.
Concerns are rising that a slump in the country's exports may continue longer than expected in the face of a drawn-out trade dispute between the United States and China -- its top two trading partners -- although the decline in outbound shipments may be cyclical, partly caused by oncoming cycles in products that also happen to be Seoul's major export items, such as semiconductors.
In the three months ended March 31, imports also dropped 3.4 percent, according to the BOK.
Exports and imports are said to account for nearly 50 percent of the GDP of Asia's fourth-largest economy.
Total output in the construction sector also declined 1 percent in the January-March period, with construction investment shrinking 0.8 percent from the previous quarter.
Production in the service industry rose by 0.8 percent, partly helped by a 0.1 percent expansion in private consumption.
Government spending rose 0.4 percent in the first quarter of the year from three months earlier.
With a dip in GDP, the country's real gross national income decreased 0.3 percent from the previous quarter. (Yonhap)