Global| Mar 24 2004Q4 Pick-Up in Investment Helps South Korean Economy
Summary
The South Korean economy ended 2003 on a firm note as GDP grew 2.7% (seasonally adjusted) in the fourth quarter, that is, 11.3% annualized. It stood 3.9% above the fourth quarter of 2002 and for the year as a whole, GDP was 3.1% above [...]
The South Korean economy ended 2003 on a firm note as GDP grew 2.7% (seasonally adjusted) in the fourth quarter, that is, 11.3% annualized. It stood 3.9% above the fourth quarter of 2002 and for the year as a whole, GDP was 3.1% above 2002.
The Q4 performance is an encouraging sign after outright contraction early in 2003 and a modest increase in Q3. Private consumption remained weak throughout, but investment and net exports made important positive contributions. In particular, investment in machinery and equipment turned upward distinctly after three negative quarters, yielding its best outturn since early in 2000.
The upturn in growth toward year-end is reassuring for Korea, as 2003 otherwise had a lackluster performance by recent historical standards. Only 1998, in the aftermath of the Asian-wide currency crises, saw more weakness. In the absence of such cataclysmic events, 2003 was indeed sluggish, so the fourth quarter improvement is beneficial. It gives a firmer base now that the nation is beset with political uncertainty in the face of the impeachment of its president. [N.B. The Bank of Korea is revising these national accounts data, including rebasing them to 2000 prices from 1995. Not all the detail is available to us from this source yet, and the data in real terms presently begin only in 1995.]
| GDP & Selected Components | Seasonally Adjusted||||||
|---|---|---|---|---|---|---|
| Q4-2003 | Q3-2003 | Q2-2003 | 2003 | 2002 | 2001 | |
| GDP | 2.7 | 1.6 | -0.1 | 3.9 | 7.5 | 4.6 |
| Year/Year | 3.1 | 7.0 | 3.8 | |||
| Private Consumption | -0.5 | 0.3 | -0.8 | -2.2 | 5.5 | 7.6 |
| Fixed Investment | 3.2 | -0.7 | 0.0 | 3.6 | 9.1 | 6.2 |
| Construction | 2.6 | 1.7 | 0.7 | 7.4 | 8.4 | 10.7 |
| Machinery & Equipment | 4.3 | -4.9 | -1.0 | -2.4 | 9.6 | -1.3 |
| Net Exports (Bil.won) | SKW14.1 | SKW9.3 | SKW7.3 | SKW37.3 | SKW19.4 | SKW21.1 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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