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(2nd LD) S. Korea's economic growth cools sharply in Q4

All News 09:37 January 26, 2016

(ATTN: RECASTS headline; UPDATES with remarks from a BOK official, more details and minor changes in paras 5-10, 15; ADDS photo)
By Byun Duk-kun

SEOUL, Jan. 26 (Yonhap) -- South Korea's fourth-quarter economic growth more than halved from three months earlier as plunging construction investment offset a visible recovery in consumer spending and exports, the central bank said Tuesday.

In the three months that ended on Dec. 31, the gross domestic product of Asia's fourth-largest economy expanded 0.6 percent from the previous quarter, according to preliminary data from the Bank of Korea (BOK). From a year earlier, it grew 3 percent.

The Q4 tally marks a slowdown from a 1.3 percent on-quarter rise in the third quarter, the highest reading since the second quarter of 2010.

"Consumer spending continued to increase at a faster rate with exports doing better, but investment in the construction sector dropped by a large margin," the BOK said.

In the October-December period, consumer spending grew 1.5 percent on-quarter, quickening from a 1.2 percent expansion in the previous quarter. The Q4 reading also marks a 3.2 percent rise from the same period last year.

Exports increased 2.1 percent on-quarter, while government spending and equipment investment gained 1.2 percent and 0.9 percent, respectively.

Construction investment plunged 6.1 percent from the previous quarter.

"The contraction in the construction sector is due to a base effect stemming from rapid growth posted in previous quarters, along with a slump in the property market and a drop in large engineering projects, such as power plants," Jeon Seung-cheol, director general of BOK's economic statistics department, told a press briefing.

In the fourth quarter, the country's gross domestic income (GDI) grew 0.7 percent on-quarter, also slowing from a 0.9 percent increase in the previous quarter, according to the BOK.

GDI represents the sum of all income earned by all sectors of an economy within a country.

For all of 2015, the country's economy grew 2.6 percent, lower than a 2.7 percent on-year expansion forecast earlier and slowing from 3.3 percent growth in the previous year.

"Private spending and investment in the construction sector expanded at a fast clip, contributing to the expansion of the overall economy, but the growth of exports and investment in intellectual property products slowed," the BOK said.

South Korea's exports dipped every single month in 2015.

GDP by the agricultural sector gained 2.7 percent from a year earlier in 2015, with those by the manufacturing and service industries growing at 1.4 percent and 2.8 percent on-year, respectively.

GDI, on the other hand, grew 6.4 percent on-year in 2015, quickening from a 3.7-percent rise in the previous year and a 4-percent expansion in 2013, according to the BOK.

bdk@yna.co.kr
(END)

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