The Bank of Korea announced on the 5th that the real gross domestic product (GDP) growth rate for the first quarter was 1.3% compared to the previous quarter. This is the highest quarterly growth rate in two years and three months since the fourth quarter of 2021 (1.6%).
Despite a decline in exports, the quarterly growth rate backtracked in the fourth quarter of 2022 (-0.5%) but rebounded in the first quarter of last year (0.4%) and remained positive in the following five quarters up to the first quarter of this year with growth rates of 0.6%, 0.8%, 0.5%.
In terms of sectoral growth in the first quarter, construction investment increased by 3.3% as building and civil engineering construction both saw recovery. Exports also grew by 1.8%, mainly in semiconductor and mobile phone IT products, while private consumption increased by 0.7%, driven by goods like clothing and services like food and accommodation. Government consumption also increased by 0.8% mainly on goods expenditures.
However, facility investment declined by 2.0% due to stagnation in transportation equipment, and imports also decreased by 0.4%, focusing on natural gas and electrical equipment.
The biggest contribution to the first-quarter growth rate came from the net exports (0.8 percentage points), pulling up the growth rate by 0.8 points. Construction investment (0.5 points), private consumption (0.3 points), and government consumption (0.1 points) also contributed to the growth. On the other hand, facility investment (-0.2 points) and government investment (-0.1 points) lowered the growth rate by 0.2 and 0.1 points, respectively.
Compared to the preliminary figures, private consumption (-0.1 points) and facility investment (-1.2 points) growth rates decreased, whereas construction investment (+0.7 points) and exports (+0.9 points) were upwardly adjusted.
It is essential to note that the base year for calculating the first-quarter growth rate has changed from 2015 to 2020, leading to differences when comparing the preliminary figures with the previous ones. According to the Bank of Korea’s analysis, the average annual GDP growth rate from 2001 to 2023 in the new base year is 0.1 percentage points higher than the previous series. However, the impact of the base year adjustment on the first-quarter growth rate of 1.3% has not been disclosed.
(Photo=Yonhap News)