South Korea’s Gross Domestic Product Grows At Its Fastest Pace In Five Years; GDP Increases By 1.2 Percent From Second Quarter
South Korea's economic growth accelerates to its fastest rate in five years in the third quarter of this year. The gross domestic product (GDP) of the country recorded an increase of 1.2 percent in the July to September period as compared to the second quarter, CNBC reported on Friday.
Reports have revealed that South Korea has a 0.3 percent quarterly increase since second quarter of 2010, hence, the latest figure revealed by the Bank of Korea (BOK) is considered the fastest growth after five years.
The Wall Street Journal forecasted on Friday that the acceleration of South Korea's economy is an indication that the country's policy makers somehow succeeded on its measures to restore vitality after MERS hit the country this year.
"The contribution from consumption is growing, but I cannot pinpoint what the trend will be going forward," BOK's statistics department head Jeon Seung Cheol tells reporters.
Data showed that private consumption recorded an increase of 1.1 percent in the third quarter. On the other hand, a 1.9 percent raise was confirmed on government expenditure.
"We expect domestic demand to remain the main driver of the recovery, helped by supportive policy measures," economist Krystal Tan says in a dispatch.
"The BOK has cut its policy rate four times since August 2014, which has in turn supported a pick-up in household credit growth. With inflationary pressures benign, monetary policy will likely remain loose over the next year," she adds.
Meanwhile, exports fell by 0.2 percent in the third quarter which is an effect of frail demand from China.
"The export sector remains a weak spot, but while a strong rebound is unlikely, we expect a modest improvement in external demand, particularly from China, to offer some support in the coming quarters," Tan says.
In addition, the recent data revealed by BOK impelled some economists to check their annual growth reports.
"We are reviewing our 2.2 percent full-year growth forecast for upward revision," ING economist Prakash Sakpal says.
