14:35 | 28/04/2019 Global Economy
South Korea's economy shrank in the first quarter, declining 0.3 percent on-quarter.
This makes it the worst contraction since the global financial crisis, when the local economy sank 3.3 percent in the fourth quarter of 2008.
On-year, first quarter real GDP expanded 1.8 percent. "Private consumption and government consumption increased. But exports, capital investment and construction investment all fell." Exports, which account for around half the country's GDP, tumbled 2.6 percent on-quarter, mainly on decreases in exports of electrical and electronic equipment like LCDs.
Private consumption edged up 0.1 percent.
Government consumption rose 0.3 percent, with increased health care benefits, but much lower than the 3 percent growth seen in the fourth quarter.
Capital investment plummeted nearly 11 percent to a 21-year-low due to decreases in machinery equipment like chips. Construction investment edged down 0.1 percent.
Led by finance minister Hong Nam-ki, economy-related ministers held recently an emergency meeting and said the government will provide support measures including the injection of an extra budget and improving the corporate investment environment.
The Bank of Korea had already cut its growth outlook for the year by 0.1 percentage points to 2.5 percent last week. To reach that target, the BOK said the local economy will have to grow by around 1.2 percent in the second quarter and by around 0.8 to 0.9 percent in the remaining two quarters.