(ATTN: ADDS more details, comments in paras 6-8, 18-19)
SEOUL, Sept. 4 (Yonhap) -- South Korea's economy grew at a slower-than-expected pace in the second quarter from three months earlier on sluggish construction investment, the central bank said Tuesday.
The country's gross domestic product (GDP) expanded 0.6 percent in the April-June period, slowing down from a 1 percent on-quarter increase in the previous quarter, according to preliminary data by the Bank of Korea (BOK).
The latest reading marks a slight decrease from an earlier estimate of a 0.7 percent gain in July.
The BOK explained that investment in construction rose 0.8 percentage point lower than the July estimate, with growth of exports and imports also being revised down by 0.4 percentage point each.
From a year earlier, the local economy grew 2.8 percent in the second quarter.
In order to meet the BOK's growth target of 2.9 percent for 2018, the South Korean economy has to pull off some 1 percent on-quarter growth in both of the next two quarters.
"Technically, we need the growth rate of 0.91-1.03 percent in both the third and fourth quarters to reach 2.9 percent for all of 2018," said Shin Seung-cheol, director of the national accounts division at the central bank.
The BOK revised down its 2018 forecast by 0.1 percentage point from 3 percent in July, citing sluggish facility investment and protracted corporate restructuring in the labor-intensive manufacturing sector.
In the second quarter, both facilities and construction investment swung to negative growth, fanning concerns that Asia's fourth-largest economy is losing steam.
Investment in facilities tumbled 5.7 percent over the cited period, marking the largest on-quarter drop since the first quarter of 2016. It rose 3.4 percent in the previous quarter.
Construction investment growth also fell to 2.1 percent in the second quarter from a 1.8 percent on-quarter growth in the January-March period. It was the second time that the sector's quarterly growth finished in negative terrain in two years following a 2.3 percent decline in the fourth quarter of 2017.
Private spending edged up 0.3 percent in the second quarter, an 18-month low, slowing down from a 1 percent rise in the fourth quarter and 0.7 percent in the first quarter.
Government spending climbed 0.3 percent in April through June, marking the slowest quarterly growth in more than three years.
Exports, which account for around 50 percent of the GDP, rose 0.4 percent on-quarter, slowing sharply from a 4.4 percent rise in the first quarter, while imports retreated 3 percent.
By production, the central bank said the manufacturing industry added 0.6 percent in the second quarter, while services grew 0.5 percent in the April-June period.
The construction sector, however, dipped 3.1 percent for a near six-year low due to a decline in housing construction and public works.
Meanwhile, the BOK said the country's real gross national income (GNI) decreased 1 percent in the three-month period from a quarter earlier, backtracking from a 1.3 percent rise in the previous quarter.
The BOK said South Korea will post US$30,000 or over in GNI per capita by the end of this year.
"As the nominal GNI grew 3.4 percent in the first half and the local currency is stronger than last year, South Korea's GNI per capita will surely surpass the $30,000 level in 2018 for the first time," the BOK official said.
The gross savings ratio reached 34.6 percent in the second quarter, hitting the lowest quarterly percentage since the third quarter of 2014, while the country's gross domestic investment ratio edged down 31 percent.
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