South Korean economic growth slowed sharply in the first quarter of 2016


South Korean economic growth slowed sharply in the first quarter of 2016.

According to the advanced estimate offered by the Bank of Korea (BoK), the economy grew by 0.4% in the first three months of 2016 in seasonally adjusted terms.

The increase, near half the 0.7% pace recorded in the final three months of 2015, was below expectations for an expansion of 0.5%.

On an annualised basis, GDP growth slowed to 2.7% from 3.1% in Q4 2015, in line with economist forecasts.

According to the IMF, South Korean GDP totaled US$1.377 trillion in 2015, making it the eleventh largest economy in the world ahead of the likes of Russia and Australia.

According to the BoK, private consumption contracted by 0.3% during the quarter having expanded by a solid 1.4% in the final three months of 2015.

Capital investment also contracted, slumping by 5.9% following a 0.5% increase in the previous quarter. The decline was the steepest quarterly contraction seen since the June quarter of 2012.

Offsetting those contractions, construction investment jumped by 5.9% after a 2.4% contraction in the prior quarter. Government expenditure also increased by 1.3% as the government front-loaded expenditure at the start of the calendar year.

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