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South Korea GDP Sinks 0.4% In Q4

bankofkorea july18 25aug22 lt

South Korea's gross domestic product contracted a seasonally adjusted 0.4 percent on quarter in the fourth quarter of 2022, the Bank of Korea said on Thursday.

That missed expectations for a decline of 0.3 percent following the 0.3 percent increase in the previous three months.

Real gross domestic income increased 0.1 percent on quarter.

On the expenditure side, private consumption fell 0.4 percent as expenditures on goods (household appliances, clothing and footwear) and services (restaurants and accommodation, recreation and culture) decreased.

Government consumption rose 3.2 percent, with increased expenditures on goods and health care benefits. Construction investment expanded by 0.7 percent, as non-residential building construction increased. Facilities investment was up by 2.3 percent, driven by increases in machinery investment.

Exports contracted by 5.8 percent, as exports of goods such as semiconductors and chemical products decreased. Imports declined by 4.6 percent, owing to decreased imports of crude oil and basic metals.

On the production side, agriculture, forestry and fishing rose by 1.5 percent due to increased crop yields. Manufacturing fell by 4.1 percent, mainly due to decreases in computer, electronic and optical products and chemical products.

Electricity, gas and water supply was up by 1.0 percent, due to increased gas supply. Construction expanded by 1.9 percent, owing to increases in building construction. Services grew by 0.8 percent, led by transportation and storage and finance and insurance services.

On an annualized basis, GDP expanded 1.4 percent - also shy of forecasts for a gain of 1.6 percent and slowing from 3.1 percent in the third quarter.

For all of 2022, South Korea's GDP expanded 2.6 percent.

On the expenditure side, construction and facilities investment declined and the growth of exports and imports slowed while private consumption grew.

On the production side, while manufacturing growth slowed, the growth of services slightly expanded.

Real GDI decreased by 1.1 percent. As the terms of trade worsened due to factors such as a rise in the price of crude oil, real GDI fell short of real GDP.

Also on Thursday, the Bank of Korea said that consumer confidence improved in January with a consumer confidence index score of 90.7 - up from 90.2 in December.

Consumer sentiment for current living standards was one point lower at 82, and the future outlook was unchanged at 85.

Consumer sentiment related to future household income was one point higher at 96, and future household spending was two points higher at 110.

Consumer sentiment concerning current domestic economic conditions was unchanged at 51, and the outlook was two points lower at 60.

The expected inflation rate for the upcoming year was 3.9 percent.

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