Korea's Q1 growth ranks high among OECD

By a2016032

Published : Jun 1, 2017 - 09:33 Updated : Jun 1, 2017 - 09:33

South Korea ranked high in first-quarter economic growth among major advanced and emerging economies as its economy got a boost from recovering exports and investment, data showed Thursday.

Asia's fourth-largest economy expanded 0.9 percent on-quarter in the January-March period from three months earlier, a quarterly increase of 0.4 percentage point in the fourth quarter of last year, according to the data by the Organization for Economic Cooperation and Development.

(Yonhap)

It was the sixth-highest quarter-to-quarter improvement among the 25 OECD member nations whose growth figures were available.

The average on-quarter growth rate of the OECD economies came to 0.4 percent in the first quarter, compared with a 0.7 percent on-quarter gain in the October-December period.

Of the total, 12 countries saw their growth pace widen in the first quarter from three months earlier, while the remainder suffered slowdowns or stagnation.

Finland recorded the highest improvement of 1.5 percentage points, followed by Greece with 1.1 percentage points and the Czech Republic with 0.9 percentage point.

South Korea's better-than-expected growth for the first quarter was attributed to brisk exports that resulted in increased industrial production and corporate investment.

According to the Bank of Korea, South Korea's first-quarter outbound shipments climbed 1.9 percent from three months earlier.

Corporate capital spending rose 4.3 percent on-quarter, with construction investment gaining 5.3 percent.

Analysts painted a rather grim picture of the economy's performance for the second quarter, saying it remains unclear whether its economic growth will continue improving.

That's because the impact of China's economic sanctions against South Korea over its deployment of an advanced US missile defense system will be reflected largely in its second-quarter growth amid signs of correction in output and investment, they said.

Angered by the ongoing installation of a Terminal High Altitude Area Defense battery in southeastern South Korea, China has banned group tours to its neighbor and closed several stores of Lotte Group, which provided the golf course in return for a military-owned land plot near Seoul.

Seoul and Washington say the move is aimed at better countering missile threats from North Korea, while China insists that the system's strong radar could be used to spy on its military.

According to Statistics Korea, South Korea's overall industrial production fell 1 percent in April from the previous month, a turnaround from a 1.3 percent on-month gain in March.

Corporate investment in new equipment and facilities shrank 4 percent in April from a month earlier, with completed construction projects also sinking 4.3 percent. (Yonhap)