SEOUL: South Korea’s economy grew just 0.5 percent in the first quarter, the Bank of Korea said Thursday — a shade higher than originally estimated but weighed down by an extended export slump.
The revised on-quarter growth figure for the January-March period was slightly up on the central bank’s earlier estimate of 0.4 percent, but still down from 0.7 in the final quarter of last year.
Asia’s fourth largest economy is currently struggling with growing jobless woes, mounting consumer debt and falling exports in the face of slowing global demand.
On-year growth stood at 2.8 percent in the quarter, also up by a fraction from the bank’s earlier estimate.
Exports, which account for nearly half of the South Korean economy, have been in decline for 17 straight months, while household debt has spiralled, hitting about $1 trillion at the end of December.
In April, the central bank cut its outlook for 2016 to 2.8 percent and its benchmark interest rate has been maintained at a record low of 1.5 percent for the past 11 months.
While forecasting a “modest improvement” in the domestic economy, the statement said the bank “judges the uncertainties surrounding the growth path to still be high”.
The government is pushing to streamline indebted and unprofitable companies, and analysts predict the central bank may cut rates again before long to combat risks during the restructuring process.
