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S. Korean economy shrinks 3.3% q/q in Q2; lowest since 1998 Updated: 2020-07-23 17:01:49 KST


South Korea's gross domestic product was sharply down in the April to June period, due mostly to COVID-19 hammering exports.
The Bank of Korea released its preliminary figures Thursday, showing that the country's second quarter GDP plunged 3.3 percent on-quarter.
It's the lowest since the first quarter of 1998, when South Korea's economy contracted by over 6 percent at the height of the Asian financial crisis.
On-year, the economy contracted 2.9 percent, also the lowest in over two decades.
Real gross domestic income fell 2 percent on-quarter.
South Korea's exports plummeted over 16 percent -- the biggest decline in over five decades.
Exports of automobile and petroleum products continued to fall as COVID-19 hammered global trade.
Imports also fell more than 7 percent.


"Exports of goods were largely lower than expected due to travel restrictions overseas, a sharp decline in overseas demands for cars and smartphones and shutdowns."

Investment in construction and facilities was also down.
South Korea's manufacturing sector dropped 9 percent, while the agriculture sector plunged 9.7 percent.
Private consumption, however, edged up 1.4 percent.
This was thanks to COVID-19 relief funds and a lower consumption tax rate on cars.


"It was largely expected that the second quarter would be the lowest. What matters now is the second half of this year. The pace of the recovery will decide this year's growth rate."

Finance minister Hong Nam-ki said Thursday that the performance was worse than expected due to external shocks, despite a pick up in private consumption.
Hong added that, if South Korea continues to keep the COVID-19 situation in check, it will see a rebound in the third quarter.
The finance minister said a recovery in the third quarter would largely depend on the effects of the supplementary budget, the administration's ambitious Korean New Deal project, and the reopening of social and economic activities.
Yoon Jung-min, Arirang News.
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