SEOUL, Oct 27 (Reuters) – South Korea’s financial progress fell to its slowest in a 12 months within the third quarter regardless of barely beating expectations, as poor internet exports offset pent-up spending, and analysts warned of additional headwinds for the trade-reliant economic system.
The nation’s gross home product (GDP) grew by a seasonally-adjusted 0.3% in actual phrases from the earlier quarter, the Financial institution of Korea estimated on Thursday, marking the slowest progress for the reason that third quarter of 2021.
Economists have pointed to rising challenges for Korea’s economic system as sustained excessive inflation, quickly rising rates of interest worldwide and persevering with international supply-chain disruptions sap demand each at dwelling and overseas.
“Immediately’s determine, though showing okay, is already concerning the previous whereas the long run is getting tougher each when it comes to home and international demand,” mentioned Park Sang-hyun, chief economist at HI Funding & Securities.
Regardless of managing constructive progress, a breakdown of the figures confirmed Asia’s fourth-largest economic system was shedding momentum shortly within the face of cooling international demand, a wave of coverage tightening and excessive inflation.
Web exports dragged the economic system down by 1.8% as imports grew a lot sooner than exports, offsetting pent-up non-public consumption and company funding in manufacturing amenities after most COVID-19 curbs had been eliminated.
Economists in a Reuters ballot had anticipated the economic system to develop simply 0.1% quarter-on-quarter within the July-September interval, slowing from a 0.7% achieve in April-June.
On an annual foundation, the economic system expanded by 3.1% within the third quarter after a 2.9% achieve within the second quarter. The result was forward of expectations for two.8% progress.
The info got here amid market hypothesis that the Financial institution of Korea could take into account slowing the tempo of financial coverage tightening, having already raised the coverage rate of interest by a complete of 250 foundation factors since August final 12 months.
The BOK raised rates of interest by a bigger-than-usual 50 foundation factors early this month and flagged extra to come back, however a cut up vote prompted some commentary that the central financial institution might reasonable the long run tempo of tightening.
Reporting by Jihoon Lee and Choonsik Yoo; Enhancing by Shri Navaratnam and Richard Pullin
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