2023-06-02 12:01:00
Consumption and construction investment increased by 0.3%
Increased overseas income, GNI growth rate 1.9%
As most of the COVID-19 distancing measures disappeared, the Korean economy grew 0.3% in the first quarter as private consumption increased. Real gross national income (GNI) growth in the first quarter was 1.9%, the highest level since the third quarter of 2020, as income earned abroad increased.
The Bank of Korea announced on the 2nd that the real GDP growth rate (provisional) for the first quarter of this year recorded 0.3% from the previous quarter, the same as the breaking figure announced in April. The quarterly economic growth rate was negative in the first and second quarters of 2020, immediately following the outbreak of Corona 19, and then maintained a positive growth trend for nine consecutive quarters from the third quarter of 2020 to the third quarter of last year. However, it turned negative once more in the fourth quarter of last year (-0.3%), when sluggish exports began in earnest, and rebounded in the first quarter, relying on consumption.
The recovery in private consumption and construction investment played a large role in the first quarter GDP growth rate turning positive, albeit slightly. Private consumption increased by 0.6% compared to the previous quarter as social distancing measures were eased, such as the lifting of the obligation to wear masks indoors. Construction investment also increased by 1.3 percent, led by building construction. Government consumption grew 0.4%, driven by social security in-kind benefits. On the other hand, facility investment decreased by 5.0% mainly in machinery such as semiconductor equipment.
The contribution of private consumption to the growth rate in the first quarter was 0.3 percentage points. This means that private consumption increased the growth rate in the first quarter. Conversely, net exports pulled down growth by 0.2 percentage points. It is interpreted that the continuing trade deficit is having a negative impact on growth.
Real GNI, which shows the real purchasing power of income earned by the people at home and abroad, grew by 1.9% from the previous quarter, exceeding the growth rate of GDP by a wide margin. This is the highest growth rate in 10 quarters since the third quarter of 2020 (2.8%). The increase in real foreign factor income in the first quarter from 8.1 trillion won in the fourth quarter of last year to 14.9 trillion won in the first quarter of this year was largely affected. This means that the amount of money people earn abroad has increased, which is interpreted as the fact that domestic companies received a lot of dividend income from capital invested overseas in the first quarter.
Shin Seung-chul, head of the Economic Statistics Bureau, said, “Unlike the high-growth era in the past, we are entering a low-growth trend and the potential growth rate is also low.”
The total savings rate (33.4%) in the first quarter of this year rose 0.7 percentage point from the previous quarter. This is because the growth rate of gross national disposable income (2.6%) was higher than the growth rate of final consumption expenditure (1.5%). On the same day, the Bank of Korea also announced provisional national accounts figures for last year, and last year’s economic growth rate was 2.6 percent, the same as the preliminary figure. Last year’s GNI per capita was $32,886. It is $225 more than $32,661 disclosed by the Bank of Korea.
1685733305
#growth #rate #quarter #plus.. #Real #Gross #Income #Highest #Years
