S.Korea's GDP grows 0.7 pct in Q2 on consumption recovery

2021-07-27 10:05:26 GMT2021-07-27 18:05:26(Beijing Time) Xinhua English

SEOUL, July 27 (Xinhua) -- South Korea's real gross domestic product (GDP) kept growing for the fourth consecutive quarter on the back of the recovery in private consumption, central bank data showed Tuesday.

The real GDP, adjusted for inflation, gained 0.7 percent in the April-June quarter compared to the previous quarter, after expanding 1.7 percent in the January-March quarter, according to the Bank of Korea (BOK).

It continued to rise since the third quarter of last year, after slumping 1.3 percent in the first quarter and 3.2 percent in the second quarter in 2020 amid the economic downturn from the COVID-19 pandemic.

Private consumption soared 3.5 percent in the second quarter from three months earlier, marking the fastest growth in 12 years since the second quarter of 2009.

It was attributable to solid demand for semi-durable goods such as clothing and the recovery in the services sector, especially the leisure and culture and the lodging and eatery segments.

However, concerns emerged about the growth path of the South Korean economy as the fourth wave of COVID-19 outbreaks began in July.

In the latest tally, South Korea reported 1,365 more cases of COVID-19 for the past 24 hours, lifting the total number of infections to 191,531. The daily caseload hovered above 1,000 for three straight weeks.

The government planned to maintain its toughest Level 4 social-distancing guideline in the Seoul metropolitan area for four weeks until Aug. 8. It was forecast to roil the consumer spending.

The BOK forecast that the negative effect of the fourth resurgence on consumer spending could be lower than the previous ones thanks to the so-called learning effect.

Plastic card spending picked up 8.1 percent for the first 20 days of July compared to the same period of last year, according to the finance ministry.

Fiscal spending advanced 3.9 percent in the second quarter from the previous quarter, logging the highest increase in 34 years since the second quarter of 1987.

Facility investment added 0.6 percent in the April-June quarter on high demand for transport equipment.

Export shrank 2.0 percent in the second quarter from the prior quarter after climbing 2.0 percent in the first quarter.

From a year earlier, the outbound shipment continued to grow for eight straight months through June. For the first 20 days of July, the export jumped 32.8 percent from a year ago.

The BOK revised up its 2021 growth outlook for the South Korean economy by 1.0 percentage points to 4.0 percent in late May.

It was lower than the finance ministry's growth forecast of 4.2 percent, but it was higher than 3.8 percent estimated by the Organization for Economic Cooperation and Development (OECD).

The supplementary budget bill worth 34.9 trillion won (30.2 billion U.S. dollars) was passed through the parliament last week to bolster the pandemic-hit economy in the second half. Enditem