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제목 Korea’s GDP Growth in the Second Quarter of 2021

The Korean economy expanded by 0.7% in the second quarter of 2021 following a 1.7% growth in the previous quarter. The continuous growth was driven by a pick-up in consumer and government spending. Compared to a year earlier, the nation’s gross domestic product (GDP) increased by 5.9% – the fastest growth in a decade. This was in part because of the low base figures for the second quarter of 2020, and it remains to be seen whether the economy will be able to maintain the recovery momentum given the recent resurgence of COVID-19 in July and August.    

Private consumption rose by 3.5% during April through June after growing by 1.2% in the first three months of the year, while government spending increased by 3.9%, driven by health insurance expenditure. Equipment investment growth slowed to 0.6% in the second quarter from 6.1% in the first quarter, and the increase mostly came from the transportation sector.

 

                   < Quarterly Economic Growth >                 (Unit: %)

 

2019

2020

2021

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

GDP

-0.2

(1.9)

1.0

(2.3)

0.4

(2.1)

1.3

(2.6)

-1.3

(1.5)

-3.2

(-2.6)

2.2

(-1.0)

1.1

(-1.1)

1.7

(1.9)

0.7

(5.9)

Consumer

Spending

0.2

0.7

0.5

0.9

-6.6

1.2

0.2

-1.3

1.2

3.5

(3.6)

Government

Spending

1.0

1.6

1.7

1.9

1.6

1.0

0.1

-0.4

1.6

3.9

(5.3)

Construction

Investment

-0.2

2.4

-3.3

5.3

0.1

-2.9

-3.9

3.5

1.3

-2.5

(-1.5)

Equipment

Investment

-8.3

3.5

0.3

3.4

0.1

0.7

5.8

-0.6

6.1

0.6

(12.2)

Intellectual Property

Investment

1.2

0.1

0.7

0.4

1.2

1.8

0.8

1.3

0.2

 

1.9

(4.3)

Exports

-4.2

2.2

3.7

0.5

-0.8

-15.9

16.3

5.3

2.0

-2.0

(22.4)

Imports

-3.8

3.9

-0.1

-0.6

-2.6

-5.8

5.9

1.5

2.9

2.8

(13.7)

*Figures in (      ) refer to year-on-year growth rates.

(Source: Bank of Korea, July 27, 2021)

 

 

 

Although exports jumped by 22.4% year on year, they shrank by 2% from the prior quarter, putting a drag on overall economic output in the second quarter. A shortage of semiconductors for automobiles was a primary factor that reduced exports, but outbound shipments of cars continued to grow strongly. 

The fourth wave of the coronavirus pandemic that Korea is now struggling to contain may put the brakes on its economic recovery. In particular, rising daily new infections during the summer vacation season are likely to weigh on the services and tourism sectors, casting clouds over the recovery of consumer spending and employment. In the Seoul metropolitan areas, tighter social distancing measures have been implemented to curb the further spread of COVID-19 during the peak summer holiday season. They include a ban on gatherings of more than four persons before 6 p.m. and no more than two persons after 6 p.m. as well as business curfew after 10 p.m. for restaurants, cafes and bars.          

 

 
 
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