South Korea reports slowest economic growth in 6 years
January 22, 2019 | Investopaper
South Korea’s economy also recorded the slowest growth in 2018. Although the final quarter reported an unexpected growth, still the economy grew at slowest annual pace since 2012.
The economy grew by 2.7% in 2018 contracting from 3.1% expansion in 2017. Bank of Korea had forecasted the same annual growth for the year. This has shown that how trade war between China and US has hampered the economy of the surrounding countries too.
The fourth quarter reported a significant fall in export. The impact of a sharp fall in export was partly counterbalanced by government spending and improvement in private consumption.
Last quarter reported growth in GDP by 1.0%. The last quarter growth exceeded the expected forecast of 2.8% growth.
Recently, China also reported the slowest growth in 28 years. South Korea’s economy largely depends on China since around 25% of South Korea’s export goes to China. Many South Korean giant companies also reported the fall in their sales revenue for the last quarter of 2018.
Declining memory-chip prices led to the first drop in Korea’s semiconductor exports in more than two years in December, customs data show. Korea is home to Samsung Electronics Co. and other global chip suppliers.
The Bank of Korea in October trimmed its growth forecast to 2.7% this year.
Most economists expect the central bank will revise down its growth and inflation outlook this year while standing pat on interest rates when it meets on Thursday.
