{"id":2206396,"date":"2024-09-06T08:00:37","date_gmt":"2024-09-05T23:00:37","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206396"},"modified":"2024-09-05T18:19:00","modified_gmt":"2024-09-05T09:19:00","slug":"south-koreas-growth-stalls-in-q2-amid-rising-import-costs-and-weak-demand","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/09\/south-koreas-growth-stalls-in-q2-amid-rising-import-costs-and-weak-demand\/","title":{"rendered":"South Korea\u2019s growth stalls in Q2 amid rising import costs and weak demand"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">South Korea\u2019s economy <\/span><a href=\"https:\/\/www.bok.or.kr\/portal\/bbs\/B0000501\/view.do?nttId=10086830&amp;searchCnd=1&amp;searchKwd=&amp;depth2=200038&amp;depth3=201263&amp;depth=201263&amp;pageUnit=10&amp;pageIndex=1&amp;programType=newsData&amp;menuNo=201264&amp;oldMenuNo=201263\"><span style=\"font-weight: 400;\">contracted<\/span><\/a><span style=\"font-weight: 400;\"> by 0.2% in the second quarter compared to the previous quarter after growing by 1.3% in the first quarter, according to the Bank of Korea. Compared to the same period last year, the real gross domestic product (GDP) \u2014 which adjusts for inflation \u2014 grew by 2.3%. Nominal gross national income (GNI), which measures the total income earned by a country\u2019s residents, increased by 0.9% from the previous quarter and 6.0% from the same time last year. However, this growth was slower than the growth in nominal GDP because of a drop in income from abroad. The real GNI, which adjusts for inflation and trade, fell by 1.4% quarter-over-quarter due to worsening trade conditions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Manufacturing saw a modest increase of 0.8% in sectors, while construction fell sharply by 6.0%, and services remained unchanged. Consumer spending decreased slightly by 0.2%, and investments in construction and equipment also weakened. Imports grew by 1.6%, slightly higher than the 1.2% increase in exports. The GDP deflator, a measure of overall price changes in the economy, rose by 4.8% compared to last year. Meanwhile, the ratio of savings to GDP was 35.2%, and the ratio of investment to GDP was 30.7%.<\/span><\/p>\n<p><b>WHY IT MATTERS<\/b><\/p>\n<p><span style=\"font-weight: 400;\">While anticipated due to base effects from the previous quarter, South Korea\u2019s second-quarter economic contraction signals slowing momentum that could negatively impact business confidence and investment decisions. The real GNI drop also suggests that South Koreans\u2019 purchasing power has <\/span><a href=\"https:\/\/koreapro.org\/2024\/08\/south-koreas-export-boom-continues-but-domestic-woes-persist\/\"><span style=\"font-weight: 400;\">diminished<\/span><\/a><span style=\"font-weight: 400;\">, which may lead to reduced sales and narrower profit margins for businesses relying on imports or selling high-end retail goods.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite the second-quarter contraction, the Bank of Korea maintains a cautiously optimistic outlook for the year. It expects the economy to rebound slightly at 2.4%, albeit slower than its earlier estimate of 2.5%. The central bank\u2019s decision last month to hold its key interest rate <\/span><a href=\"https:\/\/koreapro.org\/2024\/08\/south-koreas-central-bank-holds-rates-steady-for-13th-consecutive-time\/\"><span style=\"font-weight: 400;\">steady at 3.5%<\/span><\/a><span style=\"font-weight: 400;\">, citing moderating inflation and high household debt, reflects this approach.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The jump in the GDP deflator suggests that while inflationary pressures persist, they may not be severe enough to warrant immediate tightening, given the potential impact on economic recovery.<\/span><\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>South Korea\u2019s economy contracted by 0.2% in the second quarter compared to the previous quarter after growing by 1.3% in the first quarter, according to the Bank of Korea. Compared to the same period last year, the real gross domestic product (GDP) \u2014 which adjusts for inflation \u2014 grew by 2.3%. Nominal gross national income [&hellip;]<\/p>\n","protected":false},"author":10407,"featured_media":2206397,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24],"class_list":["post-2206396","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefings","tag-business-economy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>South Korea\u2019s growth stalls in Q2 amid rising import costs and weak demand - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2024\/09\/south-koreas-growth-stalls-in-q2-amid-rising-import-costs-and-weak-demand\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Korea\u2019s growth stalls in Q2 amid rising import costs and weak demand - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"South Korea\u2019s economy contracted by 0.2% in the second quarter compared to the previous quarter after growing by 1.3% in the first quarter, according to the Bank of Korea. 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