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SEOUL (REUTERS) – The South Korean economy grew slightly below expectations in the third quarter and in line with the previous quarter, the fall in domestic investment offsetting the positive effects of the stimulus measures taken by the government and the strength of exports.
The gross domestic product rose 0.6% in July-September, seasonally adjusted, compared to the previous quarter, the Bank of Korea said Thursday, October 25, missing the median forecast of a gain of 0 , 7% in the Reuters poll.
Construction investment fell 6.4% in the quarter, marking the largest decline since the 1997-98 Asian financial crisis, as government measures to limit rising house prices discouraged construction of housing.
Private consumption, which accounts for nearly half of the country's annual GDP, has slightly improved, rising 0.6% in the quarter, from 0.3% in June to overall growth. .
Analysts say the turmoil in global financial markets, uncertain business prospects and doubts about the government's willingness to regulate the housing market and sharply raise minimum wages have clouded the outlook.
"The negative factors that affected the third quarter remain about the same and make the outlook uncertain for the current quarter," said Park Sang Hyun, economist at Leading Investment and Securities.
South Korean companies are reluctant to increase their investment due to concerns about global demand. In the real estate sector, builders have reduced their spending due to government restrictions on the housing market, while weak job prospects have prompted consumers to cut spending.
Compared to the previous year, the economy grew 2.0%, well below the 2.8% recorded in the second quarter and above the survey's estimate of 2.2%. mainly because of an expansion higher than the trend observed in the same period last year.
Data released on Thursday showed that Asia's fourth economy is expected to maintain growth in line with the central bank's forecast for the year at 2.7%, which had been revised downwards from 2.9%.
Moon Jae-in, who took power as "president of jobs" in South Korea, has experienced a major setback, but annual employment growth has been slowing every quarter since his election last May. In the last quarter, it recorded its slowest growth in almost nine years.
The government has blamed demographic changes and challenges in a small number of sectors, but analysts attributed the deficit to a series of work-friendly policies, including a 16% increase in the minimum wage this year and a longer work week. short.
This comes as the intensification of the trade dispute between the United States and China is slowing export prospects, the main driver of the country's growth, which counts among its companies giants of manufacturing, such as Samsung Electronics and Hyundai Motor.
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