South Korea’s Economy Ekes Out Growth to Emerge From Contraction
(Bloomberg) -- South Korea’s economy eked out growth last quarter to rebound from a contraction, underscoring risks from a softening export rally, broadening geopolitical tensions and a US presidential race that weighs on the outlook for trade-reliant nations.
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Gross domestic product grew 0.1% in the three months through September from the previous quarter, the Bank of Korea said Thursday. That figure missed economists’ forecast of a 0.4% expansion by a wide margin and came after a 0.2% contraction in the second quarter.
From a year earlier, the economy expanded 1.5%, also slower than than analysts’ forecast of 2%. Uncertainties have grown over economic growth for this year and next and they will be reflected in forecasts to be renewed in November when the BOK sets its benchmark interest decision, the bank said. The BOK began its policy pivot earlier this month with a rate cut.
South Korea is among the world’s most robust exporters, with its technology industry driving earnings from abroad. But the rally in memory-chip exports has shown signs of slowing in recent months, raising questions over the intensity of global demand related to artificial intelligence development.
Exports in real terms fell due to a moderation in technology exports and dullness in other products, the BOK said. A decline in the shipments of automobiles and chemical products in particular led the export decline by 0.4% in the third quarter from the previous three months while imports increased by 1.5%, the BOK said.
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