S. Korea’s growth slows in 2Q amid falling exports
SEOUL: South Korea’s economic growth slowed in the past quarter, the central bank said yesterday, as a diplomatic row with top trading partner China over a US missile shield hit exports.
The figures come as South Korea struggles to shake off an extended economic slowdown, a key factor in the election of left-leaning new President Moon Jae-In in May, who has promised a massive fiscal stimulus package.
But second-quarter sales in the country’s key automobile industry were hammered by a wave of Chinese boycotts, seen as economic retaliation to Seoul’s agreement to a new US missile defence system, stalling any recovery.
Gross domestic product in Asia’s fourth-largest economy grew by 0.6 per cent in April to June from the previous quarter, when it expanded by 1.1 per cent, the central Bank of Korea said.
The GDP expanded 2.7 per cent from a year ago, also slowing from the 2.9 per cent annual growth recorded in the first quarter.
Exports – which account for about two fifth of the nation’s economy – shrank three per cent from the previous quarter, the biggest quarterly drop in almost three years.
“Exports of cars declined in particular as their overseas sales fell, hurting sales of auto component makers as well,” Chung Kyu-Il, director at the Bank of Korea, told reporters.
Major South Korean exporters including Hyundai – the country’s top carmaker – have been hit by a wave of consumer boycotts in China and what they saw as economic retaliation by Beijing.
Diplomatic tension rose after Seoul deployed a powerful US antimissile system to guard against threats by North Korea despite opposition by China that sees it as a threat to its own defence capability.
Beijing since then slapped a series of measures against South Korean firms and banned Chinese group tours to Seoul. Hyundai on Wednesday reported a 48-per cent drop in its second-quarter profit amid plunging sales in China. — AFP