Economic Growth Rate
The Bank of Korea announced on April 24 that Korea’s real GDP increased 3.9 percent from a year earlier in the first quarter of 2014. The growth rate is the highest since the first quarter of 2011, when the rate had reached 4.9 percent. The real GDP grew 0.9 percent between Q4, 2013 and Q1 of this year.
This implies that the Korean economy is in gradual recovery. However, experts point out that things are not entirely rosy with private consumption and capital expenditures, the two pillars for economic growth, remaining rather sluggish.
The quarterly growth rate had been 1.0 percent in Q2 last year and 1.1 percent in the following quarter, breaking the 1.0 percent mark for the first time in eight consecutive quarters, but fell back below 1.0 percent in Q4 last year and Q1 this year. In the meantime, the real GDI growth rate declined from 0.8 percent to 0.7 percent during the same period.
The growth in real GDP was led by the increasing exports and investment in the construction sector and intellectual property products. The construction investment jumped from 5.2 percent below zero to 4.8 percent as more residential buildings were built, and the private sector’s expanded R&D activities boosted the intellectual property product investment by 7.5 percent.
The 1.7 percent increase in exports was led by electronics, electrical equipment, and petroleum products. Meanwhile, quarterly imports fell by 0.5 percent due to the lessened imports of machinery, chemical products, etc. Capital expenditures declined by 1.3 percent to record a negative growth in five quarters. The exports from the manufacturing and construction sectors went up 2.1 percent and 1.4 percent, respectively.
Private consumption increased just 0.3 percent from the previous quarter, led mainly by the purchase of automobiles, durable goods, and services. The growth rate had been 0.6 percent in Q4, 2013.