Export Drives Economic Growth GDP Increases by 6.3% in the Second Quarter

The economic growth of the second quarter and the first half of this year were calculated as 6.3% and 6.1% each.

At 22nd, Korean Reserve Bank (KRB) announced that real GDP of the second quarter had increased by 6.3%.

The numerical value is below than the forecast (6.5%) of KRB, but is higher than the first quarter by 0.5%.

KRB analyzes that the high relatively economic growth is due to the increase of export and capital investment even if the increasing rate of consumption of private sector and construction investment become slowdown.

The consumption of private sector increased by 7.7% compared to the same period of the last year, but it was lower level compared to the growth of 8.4% in the first quarter. The export rate that had increased by 1.8% in the first quarter showed the rate of 11.8% in the second quarter.

Therefore, the contribution rate of domestic demand to the economic growth was 49.9%, and it became much lower than 87.0% of the first quarter. On the other hand, the contribution rate of export to the economic growth increased sharply from 13.0% to 50.1%.

According to industrial classification, manufacturing increased in value added rate, but the rate of service and construction industries became lower than the previous quarter.

The increasing rate of capital investment was 7.4% and much higher than 3.2% of the first quarter. So it reflects the possibility of the economic recovery.

GDD that expresses the effective economy level of private sector increased by 6.4% compared to the same period of the last year and the economic growth rate as the condition for international trading improved.

Cho Sung-jong, Director of Economic Statistics of KRB said, “Even if variable factors such as the instability of world financial market exist, the economy will maintain more than 6% of growth rate.”

Sang-Chul Kim sckim007@donga.com