S. Korea's economy grows 0.7 pct in Q2, unchanged from earlier estimate: BOK data

SEOUL, Sept. 1 (Yonhap) -- South Korea's economy grew at a faster pace in the second quarter of this year thanks to a pickup in private spending bolstered by eased coronavirus restrictions, central bank data showed Thursday.

The country's gross domestic product (GDP) -- a key measure of economic growth -- increased 0.7 percent in the April-June period from three months earlier, according to the preliminary data from the Bank of Korea (BOK). The growth slightly quickened from the previous quarter's 0.6 percent rise.

The latest figure was unchanged from the BOK's earlier estimate announced in late July. The revision reflected updates in data on industrial output and other key economic indicators.

The faster on-quarter growth is attributed to a robust increase in private spending that has been bolstered by eased pandemic-related restrictions.

In mid-April, South Korea lifted most COVID-19 restrictions, except the mask mandate, as part of efforts to return to pre-pandemic life.

Private spending expanded 2.9 percent on-quarter in the second quarter thanks to a rise in spending on food, lodging and other outdoor activities. The government's spending also rose 0.7 percent over the same period.

Investment on construction edged up 0.2 percent, while facility investment gained 0.4 percent thanks to a rise in spending on machinery.

Exports, however, shrank 3.1 percent with chemical and metal products suffering sluggish sales. Imports declined 1 percent owning to decreased bills for crude oil and natural gas

South Korea's economy has been facing growing uncertainty from home and abroad, amid worries that fast monetary tightening in major countries, including the United States, could precipitate a global economic slump.

In line with global monetary tightening and high inflation, the BOK has also pushed to hike its interest rate at a fast clip. The central bank has increased its interest rate by a combined 2 percentage points to 2.5 percent, including the latest 0.5 and 0.25 point rises in July and August, respectively.

The BOK earlier revised down its economic growth outlook for this year to 2.6 percent from 2.7 percent predicted three months earlier. It also raised its inflation outlook for this year from the previous 4.6 percent to 5.2 percent.

The economy grew 4.1 percent last year, the fastest growth since 2010, when it posted a 6.8 percent rise.

kokobj@yna.co.kr
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