ID :
86335
Tue, 10/27/2009 - 00:20
Auther :
Shortlink :
https://www.oananews.org//node/86335
The shortlink copeid
S. Korean economy grows 2.9 pct in Q3
(ATTN: UPDATES with more details in paras 4,7,9,14-18)
By Kim Soo-yeon
SEOUL, Oct. 26 (Yonhap) -- The South Korean economy grew at the fastest pace in
more than seven years in the third quarter on improving domestic demand and
robust exports, the central bank said Monday, bolstering optimism about an
economic recovery.
The country's gross domestic product (GDP), the broadest measure of economic
performance, expanded 2.9 percent in the July-September period from three months
earlier, up from a 2.6 percent gain in the second quarter, according to an
advance estimate by the Bank of Korea (BOK).
The third-quarter reading marked the fastest growth since a 3.8 percent advance
in the first quarter of 2002. Compared with a year earlier, the economy expanded
0.6 percent last quarter, marking the first on-year growth in four quarters.
The BOK said the strong numbers came due mainly to a wrap-up in inventory
adjustment and cautiously forecast that the economy may not contract this year if
the current trend continues.
"The Korean economy is recovering fast. In the third quarter, the private sector
led a recovery," Kim Myung-kee, director general of the BOK's economic statistics
division, told a press conference. "But because the third-quarter growth mostly
came as destocking was wrapping up, it will take some time for people to feel the
economic recovery."
Kim also hinted that the Korean economy may not contract this year compared to
2008 if local economic activity continues to improve and the global economy
maintains its recovery phase. The BOK earlier forecast a 1.6 percent contraction
in 2009.
"If the economy can pull off positive growth in the fourth quarter compared to
the third, this could translate into on-year growth surpassing 5 percent in the
October-December period," he added.
Asia's fourth-largest economy is fast emerging from its worst downturn in more
than a decade, helped by aggressive fiscal spending and rate cuts. Hit by the
global economic recession, the Korean economy tumbled 5.1 percent on-quarter in
the last three months of 2008 before rising 0.1 percent in the January-March
period.
Earlier in the day, Finance Minister Yoon Jeung-hyun said that the third-quarter
growth was a 'surprise," given that the economy still faces many downside risks
and cautiously predicted that the Korean economy will post positive annual growth
this year.
The data is underpinning optimism that the Korean economy is recovering at a
faster-than-expected pace, raising market expectations that Korea may shift into
a tight bias faster than other advanced economies.
Exports, which account for about 50 percent of South Korea's GDP, rose 5.1
percent on-quarter in the third quarter, after jumping 14.7 percent in the second
quarter.
Private spending, one of the main growth engines of the Korean economy, increased
1.4 percent, compared with a 3.6 percent gain in the preceding quarter.
Facility investment climbed 8.9 percent after rising 10.1 percent in the second
quarter, while construction investment declined 2.1 percent, compared with a 1.7
percent expansion three months earlier.
Economists say that despite upbeat economic readings, the central bank is not
likely to raise the key rate this year, given lingering uncertainty about the
economic outlook.
"The third-quarter economic performance results came as a surprise. But the
growth seemed to be aided by inventory effects," said Goh You-sun, an economist
at Daewoo Securities Co. "The BOK is expected to keep the rate put this year with
any rate hike coming in the early part of next year."
Lee Sang-jae, an economist at Hyundai Securities, said that with lingering global
economic uncertainties about sustainable growth, it would be difficult for the
BOK to hike the rate in the near term.
After October's rate-setting meeting, BOK Gov. Lee Seong-tae said that the bank
will closely monitor economic performances in the fourth quarter, hinting that
the central bank would be in no hurry to tighten monetary policy.
The government has reiterated that it is still "too early" to start unwinding
emergency measures put in place to stem a sharp economic freefall as the private
sector is still not able to grow without state help and asset price hikes are
easing.
The governor said on Oct. 15 that the local economy is expected to contract by
less than 1 percent this year. Lee downplayed the possibility of the country
experiencing a "double-dip" downturn, in which a second downturn follows a
short-lived recovery.
The BOK slashed the rate by a total of 3.25 percentage points to a record low of
2 percent between October 2008 and February in an effort to boost the sagging
economy.
sooyeon@yna.co.kr
(END)
By Kim Soo-yeon
SEOUL, Oct. 26 (Yonhap) -- The South Korean economy grew at the fastest pace in
more than seven years in the third quarter on improving domestic demand and
robust exports, the central bank said Monday, bolstering optimism about an
economic recovery.
The country's gross domestic product (GDP), the broadest measure of economic
performance, expanded 2.9 percent in the July-September period from three months
earlier, up from a 2.6 percent gain in the second quarter, according to an
advance estimate by the Bank of Korea (BOK).
The third-quarter reading marked the fastest growth since a 3.8 percent advance
in the first quarter of 2002. Compared with a year earlier, the economy expanded
0.6 percent last quarter, marking the first on-year growth in four quarters.
The BOK said the strong numbers came due mainly to a wrap-up in inventory
adjustment and cautiously forecast that the economy may not contract this year if
the current trend continues.
"The Korean economy is recovering fast. In the third quarter, the private sector
led a recovery," Kim Myung-kee, director general of the BOK's economic statistics
division, told a press conference. "But because the third-quarter growth mostly
came as destocking was wrapping up, it will take some time for people to feel the
economic recovery."
Kim also hinted that the Korean economy may not contract this year compared to
2008 if local economic activity continues to improve and the global economy
maintains its recovery phase. The BOK earlier forecast a 1.6 percent contraction
in 2009.
"If the economy can pull off positive growth in the fourth quarter compared to
the third, this could translate into on-year growth surpassing 5 percent in the
October-December period," he added.
Asia's fourth-largest economy is fast emerging from its worst downturn in more
than a decade, helped by aggressive fiscal spending and rate cuts. Hit by the
global economic recession, the Korean economy tumbled 5.1 percent on-quarter in
the last three months of 2008 before rising 0.1 percent in the January-March
period.
Earlier in the day, Finance Minister Yoon Jeung-hyun said that the third-quarter
growth was a 'surprise," given that the economy still faces many downside risks
and cautiously predicted that the Korean economy will post positive annual growth
this year.
The data is underpinning optimism that the Korean economy is recovering at a
faster-than-expected pace, raising market expectations that Korea may shift into
a tight bias faster than other advanced economies.
Exports, which account for about 50 percent of South Korea's GDP, rose 5.1
percent on-quarter in the third quarter, after jumping 14.7 percent in the second
quarter.
Private spending, one of the main growth engines of the Korean economy, increased
1.4 percent, compared with a 3.6 percent gain in the preceding quarter.
Facility investment climbed 8.9 percent after rising 10.1 percent in the second
quarter, while construction investment declined 2.1 percent, compared with a 1.7
percent expansion three months earlier.
Economists say that despite upbeat economic readings, the central bank is not
likely to raise the key rate this year, given lingering uncertainty about the
economic outlook.
"The third-quarter economic performance results came as a surprise. But the
growth seemed to be aided by inventory effects," said Goh You-sun, an economist
at Daewoo Securities Co. "The BOK is expected to keep the rate put this year with
any rate hike coming in the early part of next year."
Lee Sang-jae, an economist at Hyundai Securities, said that with lingering global
economic uncertainties about sustainable growth, it would be difficult for the
BOK to hike the rate in the near term.
After October's rate-setting meeting, BOK Gov. Lee Seong-tae said that the bank
will closely monitor economic performances in the fourth quarter, hinting that
the central bank would be in no hurry to tighten monetary policy.
The government has reiterated that it is still "too early" to start unwinding
emergency measures put in place to stem a sharp economic freefall as the private
sector is still not able to grow without state help and asset price hikes are
easing.
The governor said on Oct. 15 that the local economy is expected to contract by
less than 1 percent this year. Lee downplayed the possibility of the country
experiencing a "double-dip" downturn, in which a second downturn follows a
short-lived recovery.
The BOK slashed the rate by a total of 3.25 percentage points to a record low of
2 percent between October 2008 and February in an effort to boost the sagging
economy.
sooyeon@yna.co.kr
(END)
