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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.