September 07, 2008

South Korean economy grows 1.5% in Q4 of 2007

Korea’s economy expanded by 1.5% in the October to December 2007 quarter accelerating from 1.3% in the preceding quarter, as exports and facility investments jumped. The fourth quarter GDP figures were higher than a 1.2% on quarter expansion and a 5.2% annual rise predicted by 11 analysts surveyed by Yonhap Infomax, the financial news arm of Yonhap News Agency.


Compared with a year earlier, the gross domestic product rose by 5.5% in the October to December period up from 5.2% in the preceding quarter. In 2007, the economy advanced 4.9% from a year earlier, up from the central bank’s earlier projection of 4.8%. However, it was a slowdown from a 5 percent growth in 2006.

In the fourth quarter, exports, which make up nearly 40% of the economy rose by 7.3% from three months earlier, up from 1.5% in the third quarter, on brisk outbound shipments of machinery and wireless communications equipment. Facility investments, mainly on machinery, grew by 4.4%, a sharp turnaround from a 6.3% dip in the previous quarter.

Construction investments gained 0.4 percent, a turnaround from a 0.5% fall. Private spending, one of the main growth engines of the South Korean economy, advanced 1.1%, down from 1.2% in the preceding quarter.

Manufacturing expanded by 3.4% up from 2.7% in 3 months earlier, on increased production of semiconductors and machinery. The construction sector rose 0.4%, compared with a 0.2% drop three months earlier. However, the service sector grew 0.5 percent, down from 1.8 percent in the third quarter, as the financial and insurance industries sank.

Meanwhile, India’s gross domestic income, reflecting the actual purchasing power of the population, rose by 0.5% on quarter in the fourth quarter, down from 1.4 percent three months earlier, as terms of trade worsened amid soaring costs of raw materials.