ECONOMY | Staff Reporter, Korea

South Korea's 3Q GDP slowest in five quarters

Its economy barely grew at 2.7% YoY.

South Korea's economy grew at its slowest pace in five quarters at 2.7% y/y in 3Q16 .

Private consumption demand growth eased off after a robust 3.3% pace in 2Q16 to register 2.6% growth while the strength in fixed investments was mainly supported by double-digit expansion in construction activities.

The three consecutive quarterly contractions in facilities investment continued to point to a weak investment demand.

Meanwhile, export activities were held up by shipment of semiconductors and chemical products.

On a seasonally-adjusted q/q basis, the GDP growth moderated to 0.7% in 3Q16 from 0.8% in the preceding quarter.

UOB maintains its full-year growth forecast for South Korea's economy at 2.8% with 4Q16 GDP growth likely around 2.6% y/y.

Following the monetary policy meeting this month, the BOK reiterated its 2016 growth forecast at 2.7% but lowered the outlook for 2017 to 2.8% from 2.9%.

UOB expects headline inflation at 1.0% this year and 1.9% in 2017.

"We see downside risk to the BOK's inflation for 2017 as a result of weak domestic demand," it said. 

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