South Korea’s gross domestic product climbed a seasonally adjusted 1.2 percent on quarter in the fourth quarter of 2019, the Bank of Korea said in Wednesday’s preliminary reading.
That beat forecasts for an increase of 1.0 percent and accelerated from the 0.4 percent gain in the three months prior.
Real gross domestic income (GDI) increased by 0.5 percent compared to the previous quarter.
On the expenditure side, private consumption was up by 0.7 percent, as expenditures on durable goods (e.g. motor vehicles) and services (e.g. food, recreation and culture) increased.
Government consumption rose by 2.6 percent, with increased expenditures on goods and health care benefits.
Construction investment expanded by 6.3 percent, as building construction and civil engineering increased.
Facilities investment grew by 1.5 percent, led by the growth of investment in machinery (e.g. semiconductor manufacturing equipment).
Exports fell by 0.1 percent, due to a decrease in transportation service despite an increase in machinery. Imports remained the same compared to the previous quarter, owing to decreased expenditure of resident households abroad despite increased imports of motor vehicles.
On the production side, agriculture, forestry and fishing increased by 2.2 percent, mainly due to increased crop yields and fishery production.
Manufacturing rose by 1.6 percent, mainly due to an increase in machinery and equipment.
Electricity, gas and water supply rose by 3.9 percent, due to an increase in electricity.
Construction expanded by 4.9 percent, owing to increases in building construction and civil engineering.
Services grew by 0.7 percent, led by wholesale & retail trade, accommodation and food services, and human health and social work.
On a yearly basis, GDP advanced 2.2 percent in Q4, exceeding expectations for 2.0 percent – which would have been unchanged from the previous three months.
For all of 2019, South Korea’s GDP was up 2.0 percent on year.
On the expenditure side, while the growth of government consumption expanded, construction and facilities investment contracted as private consumption expenditure and export growth slowed.
On the production side, the growth of manufacturing and services slowed down and construction continued to decline. Real GDI fell by 0.4 percent. As the terms of trade worsened due to factors such as a decrease in semiconductor prices, real GDI fell short of real GDP.