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Monday, April 15, 2024

Korea on track to hit 2.6 percent 2022 GDP growth target

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Containers stacked at a dock in a port in Busan on Oct. 3 [YONHAP]
Korea’s economy grew by 3.1 percent in the third quarter on year, according to an advanced estimate released by the Bank of Korea Thursday.

The number puts the country on track to hit its annual target.

“Mathematically speaking, Korea is able to achieve the annual target growth of 2.6 percent even if growth in the fourth quarter is zero percent,” said Hwang Sang-pil, head of the Bank of Korea’s economic statistics bureau, in a press conference held in central Seoul.

Increases were reported in all major categories, except construction — down 1.5 percent on year — and the agriculture, forestry & fishing category — down 1.4 percent.

Private spending rose 5.9 percent on year, while government spending was up 2.4 percent. Exports rose 4.6 percent, and imports 7.7 percent.

Transportation was up 10.7 percent, and wholesale, accommodation and food 9.3 percent in the same period.

“The third quarter growth was generally in line with the research bureau’s forecast,” Hwang said. “As outdoor activities grew from the recovery of everyday life, private spending centered on food, accommodation, transportation and culture increased.

“Private spending is expected to steadily recover, but the recovery speed could slow due to interest rate increases and the direction of inflation. Comprehensively, we cannot say how the fourth quarter will turn out to be due to the uncertain growth path for our growth.”

The Bank of Korea raised the base interest rate by half a percentage point on Oct. 12 to 3 percent, and signaled further increase in the rate. Gov. Rhee Chang-yong said the outlook for a 3.5 percent rate in the current round of monetary tightening seems “reasonable.”

Inflation in Korea has slowed since August but remains above 5 percent. In September, inflation was 5.6 percent.

GDP grew 0.3 percent in the third quarter compared to a quarter earlier. The on-quarter growth rate was the slowest since a 0.2 percent increase in the third quarter last year.

Gross domestic income (GDI), the total income received by all sectors of an economy, fell 1.9 percent from the same period a year earlier.

BY JIN MIN-JI [jin.minji@joongang.co.kr]