South Korea’s GDP up 0.6% in Q3

The country will have to post a growth rate of at least 0.8% for the fourth quarter of this year to achieve its annual growth target of 2.7%.

South Korea

South Korea’s gross domestic product (GDP) gained 0.6% on a seasonally-adjusted basis for the third quarter, in line with economists’ expectations and the same pace of growth as the preceding quarter.

On a year-on-year basis, the economy grew by 2.0% for the third quarter, the Bank of Korea (BOK) said in a preliminary reading on Wednesday. The results were the slowest annual growth since 2009, lower than the 2.2% predictions from economists and the 2.8% growth in the second quarter.

The country will have to post a growth rate of at least 0.8% for the fourth quarter of this year to achieve its annual growth target of 2.7%. The growth predictions are already a downgrade from an earlier 3.0% target.

Exports which account for about half of the export-driven nation, rose 3.9% on a quarter-on-quarter basis for the third quarter. The country’s exports are currently exposed to risks as China is Korea’s biggest trading partner and any turbulence coming from China is likely to affect South Korea.

Over the weekend, the United States (US) and China called for a truce on their trade war where hundreds of billion worth of goods have been hit by tariffs on both parties.

However, the truce is only temporary and both the US and China plan to reach a broader trade agreement under a deadline of 90 days.

In the BOK Business Survey Index report last Wednesday, South Korean manufacturers posted a softened business outlook for this month as they expect weaker exports and slackening local consumer demand.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Find articles by writer