S. Korean economic growth likely to slow in Q4: analysts

SEOUL, Nov. 11 (Yonhap) -- South Korea's economic growth is expected to lose
steam in the fourth quarter due to feeble consumer and corporate spending,
following strong gains in previous quarters, analysts said Wednesday.
Helped by a massive stimulus program, the nation's gross domestic product (GDP)
grew 2.9 percent in the July-September period from the previous quarter, the
fastest gain in more than seven years. Quarterly growth was 2.6 percent in the
second quarter.
"It is very likely the economy will substantially decline in the fourth quarter
because it grew at excessively fast rates in the second and third quarters," a
central bank official said, without elaborating.
But private economists said the expected downturn would result from flaccid
private spending.
"The economy has bounced back to the level seen in the third quarter last year,"
said Kwon Soon-woo, a senior economist at the Samsung Economic Research
Institute. "But it will likely face another slowdown as the private sector still
lacks the momentum to pull the economy further."
Some watchers warn that the economy may lapse into a double dip, or a second
economic downturn after a short-lived recovery, if the effect of government
stimulus measures wanes.
Finance Minister Yoon Jeung-hyun earlier said that the government will maintain
its expansionary policy stance until a sustainable economic recovery is assured.
The nation's central bank is widely forecast to keep its key interest rate at a
record low of 2 percent in its rate-setting meeting on Thursday.
Analysts also said the expected decline in fourth-quarter GDP growth may also cut
into local firms' profits.
According to financial information provider FnGuide Inc., the combined operating
profit of 104 listed companies are estimated to decrease 6.2 percent on-quarter
to 15.5 trillion won (US$13.4 billion) in the last three months of this year.
pbr@yna.co.kr
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