South Korea GDP Growth Beats Expectations in Q4
The South Korean economy expanded 0.4 percent on quarter in the last three months of 2016, beating market expectations of a 0.3 percent increase. Yet, it is the lowest growth rate in six quarters as household, public spending and investment slowed and exports edged down, preliminary estimates showed.
Private consumption expanded a meager 0.2 percent (0.5 percent in the previous period) as expenditures on durable goods increased. Public spending rose at a slower 0.5 percent (1.4 percent in the previous period).
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Gross fixed capital formation eased (0.8 percent compared to 2 percent in the previous period): facilities investment grew 6.3 percent (0.2 percent in the previous period), led by investment in transport equipment and machinery; investment in intellectual property products expanded 0.2 percent (0.6 percent in the previous period) with an increase in R&D investment and construction investment fell 1.7 percent (+3.5 percent in the previous period) with a decrease in civil engineering.
Exports contracted 0.1 percent (+0.6 percent in the previous period), mainly due to sales of transport services that offset an increase in exports of automobiles. Imports rose 0.2 percent (2.8 percent in the previous period), as purchases of crude oil and natural gas increased.
Year-on-year, the economy advanced 2.3 percent, below 2.6 percent in the previous quarter but above market expectations of 2.2 percent. Considering full 2016, the GDP advanced 2.7 percent, slightly higher than 2.6 percent in 2015 and matching the central bank growth target.