South Korea’s economy shows growth in the third quarter, as the country recovering from more-than-a-decade deepest contractions as the government's stimulus measures showing it's results and the country's key trading partners has eased their coronavirus restrictions. The economy in the fourth-biggest economy in Asia grew a seasonally adjusted 1.9% in the Q3 of 2020 from the previous quarter and marking the sharpest expansion since Q1 2010, the South Korea central bank (BOK) said.
In the second quarter, the economy declined by 3.2%, the steepest since 2008, lower than the media prediction of 1.7%.
A Capital Economics' economist, Alex Holmes, foreseeing a 1% contraction of GDP this year, with a highlight in the risks of ongoing second wave pandemic severity in the European countries and the United States. He said that while the contractions would be the country's worst performance since 1998, the figures would still make South Korea one of the best-performing countries in 2020.
The BOK, which has lowered the interest rate to 0.5%, the record low, has predicted the contraction of 1.3% this year, the biggest decline in more than two decades.
South Korea's Finance Minister Hong Nam-ki said the GDP projections and data confirm the growth trajectories are heading to the "normal" state, and it's important in public encouragement that the country can overcome the crisis. Last month, the government began releasing the final of four fiscal stimuli, injecting a total of around 310 trillion won ($274.83 billion).
In the Q3 of 2020, exports spiked 15.6% sequentially, showing the fastest rebound since 1986, overturning a second-quarter contraction of 16.1%. In the construction sector, signs of improving factory production are showing with output in the manufacturing sectors inclined by 7.6% compared to the second quarter. On the other side, construction investment has seen lagging behind, showing 7.8% contraction on-quarter, and private consumption also contracted by 0.1%.
South Korea’s economy shrank 1.3% in Q3 on a year-on-year basis, after previously declining a revised 2.7% in the Q2.
