South Korea’s football team may be firing blanks at the East Asian Cup, but the national economy has started scoring goals again. On Thursday, Asia’s fourth-largest economy beat expectations by posting its fastest growth rate in more than two years, expanding by 2.3 percent on an annualized basis following increased private consumption and government spending.
The 1.1 percent rise in gross domestic product for the June quarter exceeded the 0.8 percent growth of the previous quarter, beating the median 0.8 percent estimate of economists polled by Bloomberg News.
According to the latest data, private consumption grew by 1 percent although investment sagged to just 0.5 percent growth. Exports expanded by 1.5 over the quarter, down from the previous quarter’s 3 percent gain as the weaker yen reduced competitiveness.
ANZ economists Louis Lam and Raymond Yeung described the figures as “encouraging” in the face of slowing growth in China, the nation’s biggest trading partner.
“We believe the economy has bottomed. Growth prospects are set to further improve in the [second half] as the US markets are recovering and [the] impact of the supplementary budget is kicking in, albeit at a gradual pace,” they said in a statement.
“In light of the downside risk from China’s slowdown, we forecast the GDP to grow at 2.6 percent in 2013 and 3.9 percent in 2014.” READ MORE