South Korean economic growth slowed last quarter, thanks in part to the Galaxy Note 7

Photo by George Frey/Getty Images

South Korean economic growth decelerated in the September quarter, according to the advance GDP estimate released by the Bank of Korea (BoK) earlier today.

After seasonal adjustments, the economy grew by 0.7% for the quarter, down on the 0.8% pace of Q2 but ahead of forecasts for an increase of 0.6%.

It left the year-on-year expansion at 2.7%, down on the 3.3% rate reported in the previous quarter.

According to the BOK, private consumption increased by 0.5% during the quarter, down from 1% in Q2, while construction investment grew by 3.9% thanks to a lift in both residential and non-residential building, accelerating from the 3.1% growth recorded previously.

Government consumption grew by 1.4%, in part due to an increase in health insurance benefits.

Those positive were partially offset by a 0.1% drop in capital investment, a sharp reversal on the 2.8% growth of the previous quarter.

Despite the beat on both quarterly and year-on-year GDP, the Bank of Korea suggests growth could have been even better, citing troubles at electronics giant Samsung following the release, then recall, of the Galaxy Note 7, along with industrial action at Hyundai.

“When you take away the effects from Samsung and Hyundai, third-quarter growth was considerably better than expected,” said Chung Kyu-il, a director at the Bank of Korea.

According to the Asia Times, Chung added the economic effects of Samsung Electronics decision to scrap the Note 7 were nearly all reflected in third quarter GDP data.

This table from the BoK breaks down the advanced GDP reading into individual components.

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