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제목 Korea's Economic Growth in the Third Quarter of 2018

Korea's Economic Growth in the Third Quarter of 2018

Korea's gross domestic product (GDP) expanded by 0.6 percent in the third quarter of 2018 compared to the previous quarter, with government spending increasing by 1.6 percent driven by a rise in expenditure on health care benefits. Consumer spending also rose by 0.6 percent on the back of an increase in consumption of non-durable and semi-durable goods. The year-on-year growth rate of GDP fell to 2 percent in the third quarter of 2018, marking the slowest expansion since the third quarter of 2009. This weak economic growth was attributed to sluggish construction and equipment investment.

Trends of Quarterly Economic Growth
*Figures in ( ) refer to year-on-year growth rates.(Source: Bank of Korea)

Construction investment declined by 6.4 percent in the third quarter, representing the sharpest on-quarter contraction since the second quarter of 1998 when the nation was in economic distress due to the Asian financial crisis. The slump in the construction sector has been fueled by the government's measures aimed at curbing house price hikes and a reduction in public infrastructure budget.

Equipment investment continued to remain sluggish, posting an on-quarter decrease of 4.7 percent. A decline in investment spending on machinery was the major factor behind the contraction.

Export growth remained positive despite an ongoing trade war between the US and China. Exports grew by 3.9 percent in the third quarter compared to three months before thanks to increases in outbound shipments of semiconductors. Meanwhile imports fell by 0.1 percent due to drops in imports of machinery.


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