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South Korea economy grows 0.9% in Q3: central bank

Friday, October 24, 2014 - 08:21
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South Korea's economic growth picked up in the third quarter on revived consumer spending and a government stimulus package, the Bank of Korea said Friday.

[SEOUL] South Korea's economic growth picked up in the third quarter on revived consumer spending and a government stimulus package, the Bank of Korea said Friday.

Gross domestic product rose a seasonally adjusted 0.9 per cent from the April June-period, which had recorded growth of 0.5 per cent from the first quarter.

The central bank data showed a rebound in consumer spending, which had stalled in the second quarter as the entire country was plunged into mourning over the April 16 Sewol ferry disaster.

Year-on-year, the economy grew 3.2 per cent in the third quarter, slower than the previous quarter's 3.5 per cent.

The government unveiled a US$40 billion stimulus package in July as Finance Minister Choi Kyong-Hwan warned of the risk of recession.

The package worth around 41 trillion won was made up of 11.7 trillion won in expanded spending and 29 trillion won in extra financing support.

The lion's share will be spent this year, with 3.0 trillion won earmarked for the beginning of 2015.

The central bank played its part by cutting its key interest rate by 25 basis points in August and then again by the same amount in October.

The benchmark rate now stands at 2.0 per cent, matching a record low last seen from February 2009 through June 2010, when Asia's fourth-largest economy was seeking to recover from the global financial crisis.

Earlier this month, the Bank of Korea revised its economic growth estimate for 2014 from 3.8 per cent to 3.5 per cent, and trimmed the 2015 outlook from 4.0 per cent to 3.9 per cent.

AFP