The South Korean economy is estimated to have expanded 1.1 percent in the second quarter, a dramatic turnaround from an unexpected contraction the previous quarter, partly afforded by increased government spending, central bank data showed Thursday.
The country's gross domestic product (GDP) expanded an estimated 1.1 percent from three months earlier in the April-June period, after backtracking 0.4 percent in the previous quarter, according to advance data from the Bank of Korea (BOK).
The estimate marks the highest on-quarter growth since the third quarter of 2017, when Asia's fourth-largest economy expanded 1.5 percent.
From the same period last year, the local economy grew 2.1 percent in the second quarter, also marking the highest growth since the last quarter of 2018, according to the BOK.
The central bank earlier slashed its annual growth outlook to 2.2 percent for the year from the 2.5 percent forecast three months earlier, citing prolonged trade tensions.
South Korea's exports have been on a steady decline since December, while its consumer prices continue to grow at below 1 percent and facility investment also has remained in the doldrums amid increased economic uncertainty.
In the three months ended June 30, exports increased 2.3 percent from three months earlier, with imports growing 3 percent, the BOK said.
Private consumption also picked up pace in the second quarter, growing 0.7 percent from three months earlier, compared with a 0.1 percent on-quarter increase in the first quarter.
The GDP growth in the second quarter, however, was largely attributed to increased government spending, which rose 2.5 percent from three months earlier and 7.3 percent from a year earlier.
The contribution of government consumption to growth also jumped 1.3 percentage points from three months earlier in the second quarter, while that of private spending retreated 0.2 percentage point, according to the BOK.
On the production side, the GDP of the manufacturing sector added 1.8 percent from three months earlier, while that of the farming sector, including forestry and fisheries, dropped 3.7 percent.
The output by the utilities sector jumped 8.3 percent on-quarter.
Investment also expanded in the second quarter, apparently taking advantage of a low base from the first quarter.
Facility investment expanded 2.4 percent from three months earlier in the April-June period, with construction investment growing 1.4 percent over the cited period. (Yonhap)
Park Byung-uk firstname.lastname@example.org