S. Korean economy shrinks 1.4 pct in Q1 amid virus fallout, sharpest contraction since 2008
SEOUL. KAZINFORM South Korea's economy shrank 1.4 percent on-quarter in the first quarter of this year, as the coronavirus pandemic crippled industrial output, consumer spending and job markets, the Bank of Korea (BOK) said Thursday.
It marked the sharpest quarterly contraction since the fourth quarter of 2008, when the nation's economy sank 3.3 percent on-quarter, Yonhap reports.
The first-quarter gross domestic product, however, was above market expectations. A survey conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency, had expected the nation's economy to contract 1.81 percent in the quarter.
In the fourth quarter of last year, Korea's economy grew 1.3 percent.
On an annual basis, South Korea's economy added 1.3 percent in the first quarter, marking the weakest growth since the third quarter of 2009, when the economy increased 0.9 percent.
Private consumption sank 6.4 percent on-quarter in the first quarter, marking the sharpest decline since the first quarter of 1998, when it plunged 13.8 percent.
Exports fell 2 percent in the first quarter from the previous quarter, but facility investment gained 0.2 percent and construction investment rose 1.3 percent.
«Exports fell by 2 percent, due to decreases in motor vehicles, machinery and chemical products despite an increase in semiconductors. Imports decreased by 4.1 percent, owing to decreased imports of crude oil and motor vehicles,» the BOK said in a statement.
Government spending increased 0.9 percent in the first quarter.
Shortly after the BOK announced the first-quarter GDP data, Finance Minister Hong Nam-ki said the pandemic's shocks to South Korea's exports and job markets could widen in the second quarter.
South Korea has apparently managed to bring the coronavirus outbreak under control without lockdown measures.
Park Yang-su, a director-general at the BOK, told a news conference held over YouTube that consumer sentiment recently showed signs of a recovery as the nation eased some restrictions on social-distancing guidelines, but exports and employment suffered.