South Korea’s third-quarter gross domestic product (GDP) grew slower at 0.6 percent instead of 0.7 percent pace in preliminary data in October due to unexpected setbacks at the manufacturing sector from Samsung Electronics’ discontinuation of Galaxy Note7 and lengthier-than-expected strike at the country’s two largest automakers, said the central bank.

According to revised GDP data released by the Bank of Korea on Friday, the nation’s GDP totaled 377.6 trillion won ($323.8 billion) in the July - September period, gaining 0.6 percent from the previous period, further slowing down from 0.8 percent growth in the second quarter.

The economy has been moving at snail’s pace of below 1 percent quarterly since the second quarter of 2014 except for brief growth of 1.2 percent in the third quarter of 2015.

On annualized rate, Korea’s GDP expanded by 2.6 percent in the third quarter, sharply slowing from 3.3 percent gain in the second quarter.

The manufacturing sector recorded 0.9 percent on-quarter growth, the lowest since 1.1 percent drop in the fourth quarter of 2009 due to ill fortunes at the nation’s two major manufacturers - lengthy strikes at Hyundai Motor and Samsung Electronics’ global recall and discontinuation of its premium phone Galaxy Note7. The growth in the manufacturing sector has remained subdued under 1 percent for four consecutive quarters, raising concerns for fixated slow motion in the economy.

The government upped fiscal spending by 1.4 percent through supplementary and expanded fiscal budgeting in the third quarter. Housing boom amid loose liquidity and loan deregulations bumped up construction investment by 3.5 percent on quarter, the sole boost to domestic demand.

Growth in private consumption stopped at 0.5 percent in the third quarter, retreating from 1.0 percent growth in the previous quarter while corporate spending gained just 0.2 percent compared with 2.8 percent growth in the second quarter.

Exports rose by 0.6 percent, slowing down from 1.1 percent pace in the previous quarter. Imports gained 2.8 percent in the third quarter, further expanding from 2.1 percent rise in the previous three-month period.

The real gross national income also fell by 0.4 percent compared to the previous quarter, contracting for the second consecutive quarters for the first time since the 2008 global financial crisis.

By Chung Ui-hyun

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]