A slowdown in Korean economic activity; interest rates remain unchanged in Japan: Economic wrap

A slowdown in Korean economic activity; interest rates remain unchanged in Japan: Economic wrap
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Updated 26 October 2021

A slowdown in Korean economic activity; interest rates remain unchanged in Japan: Economic wrap

A slowdown in Korean economic activity; interest rates remain unchanged in Japan: Economic wrap
  • Producer prices in Spain leaped by an annual rate of 23.6 percent in September

South Korea’s economy jumped by 4 percent year-on-year in the third quarter of 2021, slowing from the 6 percent increase it experienced in the prior period, a preliminary estimate by The Bank of Korea showed. 

Jumps in Covid-19 cases across the country have caused both private consumption and fixed investment to slow in this year’s third quarter. Meanwhile, government expenditure increased by 6.3 percent, up from last quarter's 5.3 percent growth rate.

In addition, the country’s GDP recorded a quarterly growth of 0.3 percent, dropping from 0.8 percent in the previous period, according to preliminary estimates.   

Rates to remain steady in Japan

Unlike other central banks that hiked their interest rates, the Bank of Japan is set to keep its rates on hold.

Japan has been experiencing high producer prices in the last period, yet consumer inflation remained at zero due to weak domestic demand.

The bank is expected to maintain its targets for short-term interest rate and 10-year bond yields at -0.1 percent and 0 percent respectively.

Producer prices in Europe 

Producer prices in Spain leaped by an annual rate of 23.6 percent in September, up from 17.6 percent in the previous month, official data showed. This is the highest rate since December 1977.

The hike in prices was driven by supply chain disruptions, energy shortages and last year’s low base effects.

Similarly, Sweden's producer prices soared to a record high of 17.2 percent on a yearly basis in September, expanding from 15.8 percent in August, Statistics Sweden said. 

Producer inflation has now risen for the eighth month in a row as costs of natural gas and crude oil helped fuel the increase in prices.

Singapore’s manufacturing

Singapore’s manufacturing output fell by 3.4 percent year-on-year in September, declining sharply from last month’s growth of 11 percent. Singapore Economic Development Board also said that a rise in the Delta variant cases contributed to the slip in production.

Biomedical manufacturing slumped by 35.9 percent while general manufacturing output declined by 2.7 percent in September, down from a growth rate of 6.4 percent in August. 

Manufacturing output also declined on a monthly basis in September, decreasing by 2.8 percent.