Gross domestic product expanded 1.5 percent in the three months ended June 30, compared with the first quarter this year when it grew 2.1 percent, the Bank of Korea announced Monday. Compared with the same period last year, the economy grew 7.2 percent. The figures are preliminary and may be revised.
South Korea, Asia’s fourth-largest economy, has rebounded strongly from the global downturn to expand six straight quarters, boosted by record-low interest rates, government stimulus spending and robust exports.
The latest GDP figure, which beat the central bank’s own forecast as well as analyst estimates, comes amid worries about the durability of the global recovery. Monetary authorities are raising interest rates, government stimulus programs that have helped promote growth are winding down, the US is showing signs of slowing and questions linger about Europe’s financial health.
“The data show that at least through the second quarter, like most of the Asian region, the Korean economy continued on a strong uptrend,” said David Cohen, director of Asian economic forecasting at Action Economics in Singapore.
Cohen also said, however, that the result comes amid broader concerns about future direction as “like everywhere, people are nervous about sustainability of the momentum.” In the second quarter, South Korea’s manufacturing, exports and capital spending all posted increases from the previous three months. Exports of goods grew 7.1 percent, led by increased shipments of automobiles, semiconductors and machinery, the bank said.
