Consumption rebound in South Korea spurs pick up in economic growth

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South Korea’s economic growth received a boost last quarter from both consumption and public spending, raising the profile of President Park Geun Hye and policy makers who are utilizing stimulus to jumpstart the country. The east Asian country’s gross domestic product (GDP) expanded by 0.9% from the previous quarter, based on the report released by the Bank of Korea earlier today. When compared to the same period last year, the economy grew by 3.2%. Officials under Park’s administration increased spending in recent months and cooled down the property market in order to raise up demand after the economy slumped earlier in the year after a tragic ferry accident.

Alongside the government’s measures, its central bank has twice cut interest rates since August in order to take advantage of a slack inflation to encourage Korea’s economic recovery. Analyst Yoon Yeo Sam from Seoul’s Daewoo Securities Co., says that, “Economic growth may fall short of the BOK’s forecasts. Policy makers may have to come up with more fiscal and monetary pushes.” Choi Kyung Hwan, South Korea’s Finance Minister, earlier committed 31 trillion won, or $29 billion, in stimulus and put forward a budget amounting to a record high 376 trillion won for 2015. Meanwhile, governor Lee Ju Yeol of the Bank of Korea called on chief executives from the country’s largest companies to boost their investments. Private consumption improved by 1.1% after the period of April to June when it retreated by 0.3%, while spending by the government increased by 2.2%, which the central bank credited as being a significant contributor to growth. Published: 2014-10-24 10:29:20 UTC+00 Back to news list

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