South Korea’s GDP Growth Slows Down To 0.1% In Q3
By Bhaskar Prasad | December 6, 2012 3:23 PM EST
South Korea's economic growth slowed to 0.1 percent in the third quarter of this year compared to that in the previous quarter, weighed down by the faltering global economy and the intensifying debt crisis in the euro zone, the revised data released by the Bank of Korea (BoK) Thursday showed.
The preliminary reading in October showed that South Korea's gross domestic product, which measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy, was up 0.2 percent in the third quarter of this year compared to that in the second quarter. The economy expanded 0.3 percent in the second quarter while it rose 0.9 percent in the first quarter.
This report comes after the BoK announced last month its decision to keep the policy rate at 2.75 percent. Market participants feel that additional stimulus measures are urgently needed to boost the country's weakening economy.
The central bank has already noted that the growth in the U.S. has lost momentum and that the euro zone economy is contracting, with weaker exports in the major economies in turn bringing a slower growth in the emerging Asian economy this year. At the same time, the BoK is expecting the economic slowdown to ease and the country’s economy to improve moderately.
In October, the BoK cut the policy rate by 25 basis points to 2.75 percent. Market players sense that the monetary policy should be loosened again sooner rather than later though the BoK has shown a preference for moving slowly. There should be room for further policy loosening since South Korea posted an inflation rate of 2 percent in September, which is below the central bank's 3.0 percent target limit.
Meanwhile, according to the HSBC Purchasing Managers’ Index (PMI) released earlier this week, South Korea’s manufacturing activity continued to contract in November but improved to a five-month high. The reading of the PMI, a measure of the nationwide manufacturing activity, rose to 48.2 in November compared to 47.4 in October.
Investors sense that the euro zone crisis is likely to escalate further. They also sense that the global growth will remain subdued in 2013, led by the prolonged slowdown in the euro zone. So there is an increasing possibility that the BoK will have to further cut the interest rate this year.
To contact the editor, e-mail:
Most Popular Slideshows
- Gennady Golovkin Next Fight Options: Canelo Alvarez, Miguel Cotto Or Julio Cesar Chavez Jr.
- NFL MNF: Pittsburgh Steelers 30, Houston Texans 23 [PHOTOS]
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Travel Alert: Over 200 Canadians Infected with Mosquito-Borne Chikungunya Virus
- Economic Growth In US And Sub-Saharan Africa Allay 2015 Recession Fears
- US Dedicates 5 Airports for Travellers From Ebola-Stricken Nations, Lawmakers Want Travel Ban
- Canadian Ebola Drug: Tekmira Firm Starts Limited Manufacturing of Vaccine, Available By December; Shares Up
- WHO Races to Release Ebola Serum in 2 Weeks, Vaccines in January
- No Mercy: ISIS, Father Stones to Death Daughter for Alleged Adultery
- iOS 8 Jailbreak Release Date is Doomed as Team Evad3rs Opts Out, Pangu Hits Snag – Report
- Google Nexus 6 vs. iPhone 5S: 4 Important Things to Consider Before Switching to Android Lollipop
- Swedish Military Spots ‘Russian Submarine’ Off Stockholm Coast, An Alarming ‘Security Game Changer’
- Canada Raises National Terror Alert Level after Suspected Jihadist Runs Over Soldier
- Boy Stoned To Death For Alleged Rape, Victim Receives Dowry From Militants
- Galaxy Note 4: Best Big-Screen Phone, Says Samsung; Analysts Believe Note 4 Unlikely To Beat iPhone 6 Plus [Watch Video]