SEOUL (Reuters) – South Korea’s economy expanded at the fastest pace in three quarters in the last three months of 2018 as a jump in government spending juiced up construction and investment, though weak exports cast a cloud over the outlook for growth.
Gross domestic product increased by a seasonally adjusted 1 percent in the fourth quarter from three months earlier, the Bank of Korea’s advance estimates showed on Tuesday, beating the median forecast of 0.6 percent in a Reuters survey.
Pace - Percent - Percent - Quarter - Expansion
The annual pace accelerated to 3.1 percent, handily outpacing 2.0 percent in the third quarter and marking the fastest expansion in five quarters.
The economy rode a surge in government spending, which increased by 3.1 percent on-quarter for its biggest rise in almost nine years and helped boost construction and capital investment.
Spending - Year - End - Blow - Exports
“Increased fiscal spending towards the year end has cushioned the blow to exports, as shipments of chips and electronic products are falling,” a central bank official said.
Construction investment climbed 1.2 percent in the fourth quarter while capital investment jumped 3.8 percent, the sharpest increase in six quarters.
Consumption - Pace - Quarter - Percent - Growth
Private consumption expanded at double the pace seen in the third quarter with a 1 percent growth rate.
Exports, however, declined 2.2 percent on-quarter and remained the biggest risk for South Korea’s trade-reliant economy this...
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