Canada Wood Today | The Canada Wood Group

Korean Economy Update

Tai Jeong

By Tai Jeong

Country Director, Canada Wood Korea

September 9, 2019

South Korea’s GDP expanded an estimated 1.1% in the second quarter of 2019 after marking 0.4% growth in the previous quarter, which is attributed mainly to increased government spending. The South Korean economy grew 2.1% in the second quarter, marking the highest growth since the last quarter of 2018.

Chart: South Korea GDP Annual Growth Rate | 2019 |

Exports increased by 2.3% over the previous quarter, with imports growing 3%. Private consumption also picked up pace in the second quarter, growing 0.7%, compared with a 0.1% on-quarter increase in the first quarter. Facility investment expanded 2.4%, with construction investment growing 1.4%. The exchange rate for the Canadian Dollar averaged at 897.45 in July 2019, up by 5.01% year-over-year and up slightly by 1.51% from 884.09 in the previous month.

The government plans to further boost its spending with an additional budget of at least 6.7 trillion won (US$5.7 billion). With this, the GDP is forecasted to grow 2.4% in the second half of 2019.

However, the outlook of 2019 economy is still murky and there are still many uncertainties, including the US-China trade dispute and Japan’s export restrictions.

Home sales in South Korea plunged more than 28% in the first half of 2019 compared to a year earlier, amid tightened regulations intended to curb the rising house price. Home seekers are staying on the sidelines and hesitating over home purchases given heavy taxation and toughened mortgage regulations. The current South Korean government has introduced a series of regulations in recent years to stabilize the country’s overheated property market, which impose higher taxes and financial regulations on owners of high-priced housing and multiple homes.