South Korea GDP Expands 0.9% In Q1
The South Korean economy expanded 0.9 percent on quarter in the first three months of 2017, beating estimates of a 0.7 percent growth. The preliminary print outpaced tandem 0.5 percent expansions in the previous two quarters and is the highest since the second quarter of 2016. Faster growth was explained by improvements in all supply-side components excluding a slight downtick in services, and by a softer decline in utilities.
On the supply side, services edged up 0.1 percent in the first quarter of 2017, growing less than the 0.2 percent in the last three months of 2016. Contrastingly, construction grew further in Q1 (4.0 percent vs 1.3 percent in the previous period). Manufacturing also gained steam in the first three months of 2017, growing 2.0 percent after expanding 1.8 percent in the previous quarter. Meanwhile, agriculture rebounded in Q1, rising 6.4 percent after contracting 1.8 percent in the previous three months. As for utilities, the 2.2 percent fall was softer than the preceding 3.0 percent decline.
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On the expenditure side, private consumption expanded 0.4 percent in the first quarter of 2017 (compared to 0.2 percent in the previous quarter). Government spending grew at a softer pace of 0.5 percent (from 0.6 percent). Meanwhile, gross fixed capital formation expanded 4.0 percent following a 1.0 percent increase in the preceding quarter. Exports rebounded by 1.9 percent after a slight 0.1 percent contraction in the previous three months. Imports also rebounded markedly, increasing by 4.3 percent after also contracting 0.1 percent in the last three months of 2016.
Year-on-year, the economy advanced 2.7 percent, also outpacing forecasts of a 2.6 percent expansion and above the 2.4 percent growth of the previous quarter.