Seoul: The South Korean economy expanded by a meager 0.1 percent in the third quarter of 2024, facing challenges of weak domestic demand and a slowdown in export growth, as revealed by central bank data on Thursday.
According to Yonhap News Agency, the Bank of Korea (BOK) reported that the country’s real gross domestic product (GDP), a crucial indicator of economic growth, increased by 0.1 percent from the previous quarter during the July-September period. This figure aligns with earlier estimates but falls short of the market’s expectation of a 0.5 percent increase. The economy had shown an expansion of 1.3 percent in the first quarter but faced a contraction of 0.2 percent in the second quarter.
On an annual basis, the economy achieved a 1.5 percent growth in the third quarter, marking a decline from the 2.3 percent expansion observed in the previous quarter. In a recent adjustment, the central bank revised its growth outlook for the year down to 2.2 percent from an earlier projection of 2.4 percent. Addi
tionally, the BOK unexpectedly reduced its benchmark interest rate for the second time in a row last month, signaling potential further cuts.
The slow quarterly growth was influenced by a 0.2 percent contraction in exports during the third quarter, marking the first decline since the fourth quarter of 2022. Meanwhile, imports rose by 1.6 percent, consistent with the previous quarter’s increase. Private spending showed a recovery with a 0.5 percent rise from a previous fall of 0.2 percent, and government spending increased by 0.6 percent. However, construction investment saw a significant decline of 3.6 percent, exacerbating the 1.7 percent fall from the previous quarter, while facility investment experienced a notable increase of 6.5 percent.
The BOK addressed the potential economic implications of recent political developments, specifically President Yoon Suk Yeol’s declaration of martial law. Despite the political uncertainties, the BOK anticipates limited impact on economic growth, given the swift liftin
g of the martial law. “There have been concerns that uncertainties have grown after the martial law declaration. We take the issue seriously,” stated senior BOK official Kang Chang-goo. He further added that while the growth impact is expected to be limited, it remains premature to fully assess the effect on the real economy.
President Yoon’s declaration, announced in a late-night address, cited “anti-state forces” attempting to disrupt the constitutional order. Following a tense night, the martial law was lifted after the National Assembly voted against it, and the opposition filed a motion to impeach President Yoon.