The third-quarter economic growth rate surpassed the 1-percent level for the first time in six quarters, largely buoyed by a rise in domestic consumer spending.
According to preliminary GDP data put out by the Bank of Korea on October 23, the economic growth rate for the third quarter was 1.2 percent from the previous quarter. This is much higher than that for the second quarter (0.3%) when consumer spending contracted abruptly in the wake of Middle East respiratory syndrome. The economic growth rate has been below the 1-percent level for five consecutive quarters after recording 1.1 percent in the first quarter of 2014 and 0.5 percent in the next.
The year-on-year third-quarter economic growth rate was 2.6 percent, turning to the positive territory for the first time in six quarters. The year-on-year growth rate has fallen for five straight quarters until the second quarter this year after clocking 3.9 percent in the first quarter when the figure was 3.9 percent.
During the quarter, private consumption increased 1.1 percent from the previous quarter. Investment in construction rose 4.5 percent from the previous quarter, buoyed by the recent strength in the housing market. Meanwhile, exports were down 0.2 percent after logging a 0.3-percent increase in the second quarter. Economists commented that it will be hard to expect an economic recovery any time soon despite the slight increase in domestic consumer spending. That's because the recent consumer spending recovery was largely artificial in nature due to the government's policy measure to encourage spending while there is no telling when exports would recover.
