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South Korea posts fastest growth in three quarters for Q4

Gross Domestic Product gained an adjusted 1.0% in the fourth quarter from the previous three months.

With the help and support from government spending, the South Korea economy expanded in the fastest pace in three quarters on a seasonally-adjusted basis for the fourth quarter, beating economists’ estimates.

Gross Domestic Product (GDP) gained an adjusted 1.0% in the fourth quarter from the previous three months, statistics from the Bank of Korea showed. The performance beat the 0.6% gain economists in a Reuters survey had expected.

On a year-on-year basis, the South Korea economy expanded by 3.1% in the fourth quarter, posting the largest expansion in five quarters. The growth in the last quarter of 2018 was higher than the 2.0% increase in the third quarter and better than its 2.8% estimate.

For the full year of 2018, the economy grew by 2.7%, matching the 2.7% growth the central bank had expected.

Even so, last year’s annual growth was the slowest pace of expansion the country has seen in six years. For the third quarter, the country posted its weakest quarterly year-on-year growth since 2009.

Exports account for around half of the export-driven nation’s economic growth, and it is exposed to risks from China’s stalled performance. Chinese data on Monday showed China’s fourth quarter GDP slowing to the weakest since the global financial crisis.

China is South Korea’s largest trading partner and any turbulence coming from the Chinese nation is likely to affect South Korea. Despite the South Korean government’s stimulus, the weakness in exports and glum global growth outlook casts a dark cloud over the country’s growth for this year.

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. See full non-independent research disclaimer and quarterly summary.

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