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S. Korea's economy grows slower than earlier predicted in Q1 amid weak investment, spending

June 8, 2022 - 09:15 By Yonhap
Containers are stacked up for outbound shipments at Gamman Pier in Busan on Jan. 21. (Yonhap)

South Korea's economy grew at a slightly slower pace than earlier predicted in the first quarter of this year as investment and spending weakened amid lingering worries over the coronavirus pandemic, central bank data showed Wednesday.

The country's gross domestic product (GDP) grew 0.6 percent in the January-March period from three months earlier, according to the preliminary data from the Bank of Korea (BOK).

The growth rate was slightly down from 0.7 percent growth estimated in April. The revision reflected updated data on industrial output and other economic indicators.

The on-quarter growth slowed from a 1.3 percent rise tallied in the fourth quarter of last year. From a year earlier, Asia's fourth-largest economy expanded 3 percent in the first quarter.

South Korea's economy had been under pressure from the protracted fight against the coronavirus pandemic and stringent restrictions on business operations and people's movement.

But the government recently lifted almost all antivirus curbs as the infections slowed with most of its people vaccinated, raising hopes that the move will lead to more spending and investment down the road.

Private spending shrank 0.5 percent in the first quarter from three months earlier, the data showed.

Investment in construction and spending on facilities were also down 3.9 percent each over the same period.

Exports have been buttressing the economic growth by expanding 3.6 percent on-quarter in the first three months of the year. Imports declined 0.6 percent, the data showed.

Despite robust exports, the economy is facing mounting uncertainty from rising inflation, the ongoing war in Ukraine that possibly aggravates global supply chain disruptions and aggressive monetary tightening moves in the United States and other major economies.

The BOK recently lowered its economic growth forecast for this year to 2.7 percent from 3 percent projected three months earlier.

The economy grew 4.1 percent last year, the fastest growth since 2010, when it posted a 6.8 percent rise.

Meanwhile, the country's per-capita gross national income (GNI) stood at $35,373 in 2021. The figure was 10.5 percent higher than a year earlier.

The per-capita GNI surpassed the $30,000 mark for the first time in 2017 but had been declining slightly in 2019 and 2020 before turning upward last year, the data showed. (Yonhap)