Q2 Growth Rate 0.6%... Gross National Income Decreases by 0.7% (Update)

Private Consumption Down 0.1% · Government Consumption Down 2.1%

The Bank of Korea announced on the 5th that the real Gross Domestic Product (GDP, preliminary) growth rate for the second quarter of this year was recorded at 0.6% compared to the previous quarter. Although it increased for the second consecutive quarter, it is a 'recession-type growth' characterized by imports decreasing more than exports.

The growth rate was the same as the preliminary figure released in July. Looking at the expenditure items, private consumption decreased by 0.1%, mainly in semi-durable goods such as clothing and footwear, and services such as food and accommodation. Construction investment fell by 0.8%, mainly in civil engineering construction, and government consumption decreased by 2.1%, mainly due to social security in-kind benefits. Government consumption recorded its lowest level since the foreign exchange crisis. On the other hand, facility investment increased by 0.5%, with machinery rising despite a decline in transportation equipment.

Exports decreased by 0.9%, with increases in semiconductors and automobiles offset by declines in petroleum products. This figure was revised upward by 0.9 percentage points from the preliminary estimate. Imports decreased by 3.7%, mainly due to crude oil and natural gas. Compared to the preliminary figures, government consumption was revised down by 0.1 percentage points, construction investment by 0.5 percentage points, while facility investment was revised up by 0.7 percentage points, and imports by 0.5 percentage points.

By economic activity, manufacturing increased by 2.5% quarter-on-quarter, centered on computers, electronics, and optical equipment. Construction decreased by 3.9%, with a reduction in building construction and an expanded decline in civil engineering construction. The service sector increased by 0.3%, mainly in transportation and business services.

The total savings rate in the second quarter was 33.5%, up 0.1 percentage points from the previous quarter, as the final consumption expenditure growth rate of -0.4% was lower than the gross national disposable income growth rate of -0.2%. The gross domestic investment rate rose by 0.1 percentage points to 32.2% compared to the previous quarter.

Nominal Gross National Income (GNI) decreased by 0.2% from the previous quarter, and real GNI also declined by 0.7%. The total savings rate recorded 33.5%, up 0.1 percentage points from the previous quarter.

[Image source=Yonhap News]

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