SEOUL, 25th October, 2016 (WAM) — South Korea’s economy grew at a slower pace in the third quarter of 2016 than three months earlier, on decreased demand and facility investments, central bank data showed Tuesday.
In the July-September period, the country’s gross domestic product, GDP, increased 0.7 percent from the previous quarter, decelerating from a 0.8 percent on-quarter expansion three months earlier, according to preliminary data from the Bank of Korea, BOK.
From a year earlier, Asia’s fourth-largest economy grew 2.7 percent.
The central bank data showed that government spending grew 1.4 percent in the third quarter, compared with a 0.1 percent on-quarter expansion three months earlier, while private spending went up 0.5 percent on-quarter, decelerating from a 1 percent on-quarter gain during the same period.
Output in the manufacturing sector posted 1 percent negative growth in the third quarter, shifting from a 1.2 percent growth a quarter earlier.
Chung Kyu-il, Director of the Economic Statistics Department at the BOK, said Samsung Electronics Co.’s decision to terminate the production of the Galaxy Note 7 smartphone and the strike by Hyundai Motor Co. were mainly to blame for the contraction of the output by the manufacturing industry. Samsung Electronics halted production of the flagship Note 7 smartphone earlier this month after some of the devices caught fire.
Unionised workers of Hyundai Motors downed tools from mid-July to late September, costing the largest South Korean carmaker about 3.1 trillion Won (US$2.7 billion) in lost production, according to the company.
The central bank data also showed that facility investments fell 0.1 percent on-quarter in the July-September period, compared with a 2.8 percent on-quarter expansion three months earlier.
Exports, a major pillar of growth for the South Korean economy, grew 0.8 percent from the previous quarter, while imports increased 2.4 percent.
Gross domestic income, on the other hand, went down 0.3 percent in the third quarter from the previous quarter, compared with a 0.2 percent decline three months earlier, the BOK said.