Economy Shrinks to Lowest Level in a Decade
28 April, 2019
Korea's economy shrank 0.3 percent in the first three months of this year, the biggest decline since the 2008 global financial crisis.
The Bank of Korea said Thursday that Korea's GDP stood at W402.7 trillion in the first three months of the year (US$1=W1,163).
This is the second time since President Moon Jae-in took office that the economy shrank. The last time was in the fourth quarter of 2017 when it fell 0.2 percent. But Cheong Wa Dae spokesman Yoon Do-han said "External circumstances appear to have been the biggest reason."
A Cheong Wa Dae official said, "Global economic conditions remain unstable and this had an impact, so I do not agree with the view that government policy failed."
In June last year Cheong Wa Dae blamed the Park Geun-hye administration for causing the economy to lose momentum. The presidential office made no mention of the side effects of the drastic minimum-wage hike, which put many small enterprises out of business.
Other causes of Korea's slump are shrinking investment and declining exports. Facility investment in the first quarter dropped 10.8 percent, the lowest since the Asian financial crisis of 1998.
Moreover, semiconductor shipments, which had skewed export figures into positive territory despite an overall decline, plummeted due to falling prices and were reflected in an overall drop of 2.6 percent.
GDP grew one percent in the previous quarter thanks to government pump-priming, but economists say its momentum has waned already.
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