South Korea Q3 GDP Grows 0.3% On Quarter

bankofkorea july18 25aug22 lt

South Korea's gross domestic product expanded a seasonally adjusted 0.3 percent on quarter in the third quarter of 2022, the Bank of Korea said in Thursday's final reading - in line with expectations following the 0.7 percent growth in the three months prior.

On an annualized basis, GDP climbed 4.1 percent - again matching forecasts and up from 2.9 percent in the previous three months.

Real gross national income (GNI) decreased by 0.7 percent on quarter and 1.4 percent on year in Q3.

On the production side, manufacturing declined by 0.8 percent, as computer, electronic & optical products and chemicals & chemical products decreased. Construction rose by 1.3 percent, owing to an increase in building construction. Services grew by 0.8 percent, mainly in wholesale & retail trade, accommodation & food services, information & communication and cultural & other services.

On the expenditure side, private consumption increased by 1.7 percent, as expenditures on semi-durable goods and services (e.g. restaurants & accommodation) increased.

Government consumption went up by 0.1 percent, with increased expenditures on goods. Construction investment contracted by 0.2 percent, as civil engineering decreased.

Facilities investment increased by 7.9 percent, driven by increases in machinery and transportation equipment. Exports rose by 1.1 percent, as transportation equipment and services increased while semiconductors decreased. Imports were up by 6.0 percent, owing to increased imports of crude oil and natural gas.

Nominal GNI fell by 0.1 percent in the third quarter of 2022 relative to the quarter before, decreasing less than nominal GDP (-0.4 percent) as net factor income from the rest of the world grew.

Real GNI shrank by 0.7 percent compared to the previous quarter, running below real GDP growth (0.3 percent), mainly due to a decrease in trading loss from changes in the terms of trade, despite an increase in net factor income from the rest of the world. The GDP deflator increased by 0.2 percent year on year.

The gross saving ratio (gross saving/gross national disposable income) stood at 32.7 percent, 1.4 percentage points lower than in the previous quarter, as the final consumption expenditure (2.2 percent) increased more than the nominal gross disposable income (0.0 percent).

The gross domestic investment ratio (gross capital formation/GNDI) was 34.5 percent, 2.2 percentage points higher than in the previous quarter, due to an increase in facilities investment.

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