Q3 GDP 0.3%... Economic Uncertainty for Next Year Increases Due to 'Omicron' (Comprehensive Report 2)

1.7% in Q1, 0.8% in Q2
Signs of slowing growth trend
Possible impact of Omicron on the real economy

[Asia Economy Reporter Jang Sehee] South Korea's GDP growth rate for the third quarter stood at 0.3% compared to the previous quarter. This is the same level as the preliminary figure announced in October, raising concerns that the growth momentum may be slowing down. Experts remain optimistic about achieving a 4% growth rate this year but foresee increased economic uncertainty next year due to factors such as the Omicron variant.

On the 2nd, the Bank of Korea announced that the provisional GDP growth rate for the third quarter of this year was 0.3%. Looking at this year's trend, growth slowed from 1.7% in the first quarter to 0.8% in the second quarter and 0.3% in the third quarter. To achieve an annual growth rate of 4.0%, the economy must grow by more than 1.03% in the remaining fourth quarter compared to the previous quarter.

In the third quarter growth rate, contributions from private consumption, construction investment, and facility investment all declined. This means consumption and investment negatively impacted the third quarter growth rate. Private consumption decreased by 0.2%, affected by a decline in services such as food and accommodation and entertainment and culture, although non-durable goods like food and beverages increased. However, this was revised upward by 0.1 percentage points from the preliminary figure. Construction investment and facility investment fell by 3.5% and 2.4%, respectively. Exports increased by 1.8%, driven by coal and petroleum products, machinery, and equipment, while imports decreased by 0.7 percentage points due to a decline in automobiles.

Shin Seungcheol, Director of the Bank of Korea’s National Accounts Department, stated, "Although construction investment was revised downward compared to the preliminary figure, exports and private consumption were revised upward." Gross National Income (GNI) increased by 0.1% compared to the previous quarter.

Experts say that the outlook after the fourth quarter could be influenced by the spread of the Omicron variant. Jung Kyucheol, Director of the KDI Economic Outlook Office, expressed concerns, saying, "If lockdown measures continue in various countries, supply chain disruptions will worsen, affecting exports and overall investment. Private consumption could also decline."

Director Shin also noted, "Lockdown measures in various countries and changes in domestic quarantine systems are expected to act as variables affecting overall inflation and growth rates."

This content was produced with the assistance of AI translation services.