Due to continuing economic downturn, economic growth in the third quarter (from July to September) dropped to the four percent mark for the first time this year.
The governments goal of five percent growth will not likely be fulfilled since the economy in the fourth quarter is expected to continue showing weak export performances and low consumption in the private sector.
At a regular briefing on Friday, Deputy Prime Minister and Minister of Finance and Economy Lee Hun- jai apparently admitted the fact that the government failed to reach its growth target, saying, It is highly unlikely that the growth rate will remain around five percent this year.
Mr. Lee added, Big economic recovery will hardly be expected by the end of the year, owing to an extra-economic factor and weakened consumer sentiment. Especially in the construction sector, the economy is rapidly declining.
According to the Bank of Koreas gross domestic product (GDP) figures for the third quarter released that day, GDP has grown by 4.6 percent compared to the same period last year. The growth rate from January to September recorded 5.1 percent.
The third quarter growth is far behind that of the first and second quarters, which further indicates that the economy is rapidly falling.
The government revealed that it would use an increase of the GDP growth rate compared to the previous quarter as a standard index for growth; however, this rate has shown significantly slow growth with an increase of only 0.6 percent, following 0.6 percent in the second quarter and 0.7 percent in the first quarter.
Spending in the private sector has continued to drop for the sixth consecutive quarter with a decrease of 0.8 percent since the second quarter last year. It is the first time that private sector spending recorded minus growth for the 18th straight month.