Korea’s Q1 GDP gain adjusted down to 0.6%, ’21 per capita income at all-time high of $35,373

South Korea’s economy in the first quarter added 0.6 percent from the previous quarter, slower than the 0.7 percent estimated in April on sluggishness in consumer and corporate spending from rising interest rates and soaring prices from the Russia-Ukraine war.

According to finalized gross domestic product (GDP) data released by the Bank of Korea on Wednesday, the country’s seasonally-adjusted real GDP (GDP) gained 0.6 percent in the January-March period against the previous three months.

From a year ago, the economy added 3.0 percent in the first quarter, also adjusted down from earlier estimate of 3.1 percent.

The latest data had little impact on the markets.

The main Kospi was down 0.01 percent to 2,626.14 on Wednesday morning. The U.S. dollar slipped 0.25 percent to 1,254.4 won.

The economy must add minimum 0.5 percent in the remaining three quarters to meet annual growth target of 2.7 percent, which was revised down from 3.0 percent last month, according to the BOK.

The economy lost steam upon the outbreak of a war between resource-rich Russia and Ukraine after rebounding by an annual 4.0 percent in 2021 against the first year of pandemic that endured a recession in the first half of 2020.

Private consumption fell 0.5 percent on quarter in the first quarter on depressed sale in semi-durable goods like clothing and furniture and telecommunications devices.

Facility investment dropped 3.9 percent on slowed investment in machinery and automobile amid uncertainties from spike in energy and commodity prices. Construction investment also dipped 3.9 percent.

Government spending remained unchanged from the fourth quarter. Spending on goods increased in the first quarter but on-spot social security benefits fell.

Exports were the sole positive factor.

Outbound shipments gained 3.6 percent in the first quarter on quarter on strong demand for semiconductors and chemical products. Imports declined 0.6 percent, mainly of machinery and equipment.

When compared with the earlier estimate, construction investment growth was adjusted lower by 1.5 percentage point while export growth fell 0.5 percentage point from 4.1 percent to 3.6 percent.

Agriculture, forestry, and fisheries output grew 1.6 percent on quarter in the first quarter, manufacturing 3.3 percent, electricity, gas, and water 2.7 percent, while service output remained unchanged and construction fell 1.6 percent. Accommodation and restaurant output fell 4 percent in services.

Real gross national income (GNI) in the first quarter rose 1.0 percent from the previous quarter, gaining more than real GDP on increased net factor income.

GDP deflator, a measure of the price level of all domestically produced goods and services in an economy, rose by 2.3 percent.

Meanwhile, in a separate finalized data, the BOK reported Korea’s per capital GNI at $35,373 for 2021, the first breach above $35,000, on the appreciation in the Korean currency value. The U.S. dollar fell 3.0 percent on average last year, adding 7.2 percent value in the Korean won versus a year ago.

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