Q2 growth rate 0.7%…raised by 0.1 percentage points due to improved exports and construction investment

The preliminary real economic growth rate for the second quarter was estimated at 0.7%. Exports and construction investment performed better than expected, raising the flash estimate (0.6%) by 0.1%percentage points.

On the 3rd, the Bank of Korea said real gross domestic product (GDP) for the second quarter grew 0.7% quarter-on-quarter. Regarding the 0.1%percentage-point upward revision from the flash estimate, the Bank of Korea explained that it was slightly revised up as a result of incorporating data from the final month of the quarter (June).

Looking at detailed changes from the flash estimate, the export growth rate rose to 4.5%, up 0.4%percentage points. Construction investment increased by 0.4%percentage points, reducing its decline to -1.2%. Investment in intellectual property products was adjusted from -0.3% to 0.8%. However, facility investment underperformed expectations and was downwardly revised by 0.6%percentage points to -2.1%.

Nominal gross domestic product (GDP) grew 2.0% quarter-on-quarter. Compensation of employees rose 0.8% quarter-on-quarter due to increases in medical, health and social welfare services, and gross operating surplus increased 4.0% mainly in transport equipment manufacturing and wholesale and retail trade. Nominal gross national income (GNI) increased 2.0% quarter-on-quarter.

Reporter Kang Jin-gyu josep@hankyung.com