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South Korea Final Q4 GDP Revised Down


South Korea's gross domestic product was up a revised 0.3 percent in the fourth quarter of 2011 compared to the previous three months, the Bank of Korea said on Friday, marking the slowest rate of gain in four quarters.

The headline figure was slightly lower than the 0.4 percent gain reported in January's preliminary reading, and it follows the 0.8 percent gain in the third quarter.

On a yearly basis, GDP was up 3.3 percent - again slightly lower than the 3.4 percent increase originally reported. GDP was up 3.5 percent in the third quarter.

For all of 2011, GDP was unrevised at 3.6 percent - well shy of the central bank's forecast of 4.3 percent.

"Growth in real GDP was mainly due to the continuous strength of exports, while construction investment slumped and the rates of increase in private consumption and facilities investment slowed," the bank said in a release accompanying the data.

Real gross national income increased 1.5 percent on year, lower than the growth of real GDP due to the deterioration of the terms of trade, the bank noted.

Forestry and fishing fell 2.0 percent, owing mostly to the influence of severe weather conditions and outbreaks of foot-and-mouth disease. Manufacturing rose by 7.2 percent, with general machinery, transport equipment and metal products posting strong output gains.

Construction lost 4.6 percent, as the sluggishness of residential building construction and civil engineering continued in addition to the slower growth of non-residential building construction, the bank said.

Services climbed 2.6 percent as growth picked up in real estate and renting and information and communication. However, growth slowed in other sectors such as wholesale and retail trade, and transport and storage.

In 2011, private consumption increased 2.3 percent. While durables and semi-durables expenditures showed solid growth, expenditures on non-durables and services grew at a slower pace.

Gross fixed capital formation lost 1.1 percent. Construction investment dropped by 5.0 percent, mainly owing to the contraction of residential construction and civil engineering investment, the bank said. In contrast, facilities investment increased by 3.7 percent in response to the rise in machinery investment.

Exports of goods and services spiked 9.5 percent, led by automobiles, machinery and iron and steel products.

The GDP deflator rose 1.7 percent, down from 3.6 percent in the previous year, as the rates of increase in the prices of export and domestic goods fell short of that for imported goods.

Also on Friday, Statistics Korea said that industrial output in South Korea increased a seasonally adjusted 0.8 percent on month in February. The government also revised its January figure to show a 3.2 percent increase in output.

For the full year, industrial production was up 14.4 percent, following a revised 2.1 percent on-year decline the month before. The government's Leading Indicator increased in February to 99.8 from 99.3 in January.

by RTTNews Staff Writer

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