S. Korea’s economy grows 1.6% in Q1

Apr 28, 2021, 07:53 am

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Park Yang-su, head of the economics statistics department at the Bank of Korea explains a graph of South Korea’s GDP growth in a press briefing on April 27, 2021./ Source: Bank of Korea

AsiaToday reporters Moon Noo-ri

South Korea’s first quarter GDP growth was up 1.6 percent from the previous quarter, springing back to pre-pandemic levels. The growth is higher than expected. Considering the current trend, the growth could reach around the mid-three percent level this year.

The Bank of Korea announced Tuesday the country’s real gross domestic product (GDP) grew 1.6 percent in the first quarter from the previous quarter. The central bank had said that if the reading posts more than 1.3 percent in the first quarter, the economy is thought to have recovered to the level seen in the fourth quarter of 2019, before the pandemic. The growth rate confirmed by the central bank is higher than previously forecast. “The 1.6 percent growth in the first quarter has pushed the real GDP level higher than that of the fourth quarter of 2019,” said Park Yang-su, head of the economic statistics department at the Bank of Korea.

After contracting 1.3 percent in the first quarte of 2020 and 3.2 percent in the second quarter of 2020, the South Korean economy expanded by 2.1 percent and 1.2 percent in the third and fourth quarters of last year.

The growth was partly supported by a recovery in private consumption, which grew 1.1 percent on-quarter. It recovered significantly compared to the corresponding figures of 0 percent and -1.5 percent in the first and fourth quarters of last year. Government spending increased 1.7 percent. “The increased gift exchanges that replaced face-to-face gatherings during the Lunar New Year holidays in February and alleviation of social distancing rules around that time improved consumption in businesses and services that require face-to-face interactions,” Park said.

“The recovery trend in private consumption is expected to continue with increased household income and improved job market,” he said. However, he warned that risks tied to COVID-19 had not disappeared and sectors that require face-to-face services were still vulnerable.

Exports, mainly involving automobiles and mobile phones, expanded 1.9 percent in the first quarter, while imports increased 2.4 percent. However, the export growth rate fell from the previous quarter with 5.4 percent. “The growth itself has become slower compared with the fourth quarter of last year, but a recovery in the IT economy and the overall global economy is expected to continue to drive Korea’s exports,” Park said.

#economy #South Korea #GDP #Bank of Korea