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| ▲ Containers for exports and imports are stacked at a pier in South Korea's largest port city of Busan on Oct. 11, 2022. South Korea's exports slipped 20.2 percent on-year in the first 10 days of October due mainly to sluggish overseas sales of chips, according to data from the Korea Customs Service. (Yonhap) |
(LEAD) GDP-Q3 tally
(LEAD) Economic growth slower in Q3 but could beat annual projection: BOK
(ATTN: RECASTS headline; ADDS more info throughout, photo)
SEOUL, Oct. 27 (Yonhap) -- The South Korean economy grew at a slower clip in the third quarter than three months earlier as export growth remained subdued and spending weakened amid high inflation and worries over the possibility of a global economic recession, a central bank estimate showed Thursday.
Despite the slowing pace of growth, the Bank of Korea (BOK) predicted that the country will be able to achieve its growth outlook for this year as long as the rate does not fall sharply below zero in the remaining quarter.
The country's gross domestic product (GDP), the broadest measure of economic performance, grew 0.3 percent on-quarter in the July-September period, slowing from a 0.7 percent gain three months earlier, according to the advance estimate from the Bank of Korea (BOK).
On an on-year basis, the economy grew 3.1 percent, faster than the previous quarter's 2.9 percent growth.
The on-quarter growth rate was the slowest since the country's economy posted a 0.2 percent gain in the third quarter of last year.
The slower pace of growth comes amid rising worries that aggressive rate hikes in major countries, including the United States, could tip the global economy into a recession.
China's strict anti-pandemic restrictions and lockdowns in cities have also been cited as a serious downside risk on South Korea's export-driven economy.
The BOK has joined the global tightening by hiking its policy rate by a combined 250 basis points since August last year to tamp down rising inflation pressure. Sharp rate increases are feared to weaken investment and spending.
South Korea's exports expanded 1 percent in the third quarter from three months earlier, a turnaround from the previous quarter's 3.1 percent contraction. The third-quarter exports still remained relatively small compared with a 3.6 percent rise tallied in the first quarter, the BOK said.
Imports rose 5.8 percent in the third quarter, compared with a 1 percent fall registered a quarter earlier.
Private spending expanded 1.9 percent on-quarter in the third quarter, but the pace of growth slowed from a 2.9 percent gain three months earlier.
Government spending also slowed from a 0.7 percent advance to a 0.2 percent rise.
Facility investment, however, jumped 5 percent over the same period, compared with a 0.5 percent increase three months earlier, the BOK said.
The BOK voiced concerns that high inflation and high interest rates could slow down growth in the fourth quarter with exports facing mounting uncertainty.
"Exports during the first 20 days of this month had declined from a year earlier," Hwang Sang-pil, head of the BOK's economic statistics bureau, said. "Private spending recovery will likely continue but interest rates and elevated inflation are expected to moderate the pace of the recovery."
He, however, predicted that the country will be able to achieve the central bank's growth outlook for this year as long as the fourth-quarter rate does not fall sharply below zero.
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