SEOUL- South Korea’s economic growth nearly halved in the first quarter from the preceding three months on coronavirus curbs and surging inflation, while a slowing Chinese economy clouded the outlook for the coming months.
Gross domestic product grew a seasonally-adjusted 0.7 percent in the first quarter from the last quarter of 2021, preliminary data from the Bank of Korea (BOK) showed on Tuesday, slowing from 1.2 percent a quarter earlier, but just beating 0.6 percent growth seen in a Reuters survey.
“Domestic consumption will rebound as domestic COVID-19 curbs were mostly lifted, but China’s slowdown would severely hit exports and the overall economy in the current quarter,” said Park Sang-hyun, economist at HI Investment & Securities.
South Korean stocks and the won currency opened with modest gains after the data.
The data comes as a senior International Monetary Fund (IMF) official warned on Tuesday Asia faces a “stagflationary” outlook with likely downgrades to growth projections and surging price pressures.
Private consumption shrank 0.5 percent, the worst contraction in five quarters, as the government enforced social distancing restrictions to curb a surge in Omicron coronavirus cases.
Capital investment fell 4 percent, the fastest decline in three years, while construction investment lost 2.4 percent.
