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

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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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