SEOUL: South Korea’s gross national income posted its highest growth in more than five years during the first quarter on the back of improved trade terms from then-low oil import prices, data from the Bank of Korea showed Thursday.
Though the nation’s first-quarter GDP growth stood at 0.8 per cent over the previous quarter, its GNI a barometer for consumers’ purchasing power increased by 4.2 per cent, according to the central bank. This marked the highest figure since the GNI reached 5 per cent in the second quarter of 2009.
The nation’s quarter-to-quarter GNI growth stayed below 2 per cent in 2014 ― 1 per cent in the first quarter, 1 per cent in the second quarter, 0.2 per cent in the third quarter and 1.6 per cent in the fourth quarter.
A BOK official said the rapid growth in GNI was attributable to a great improvement in trade terms and increases in interest and dividend income. But the nation recorded a quarter-to-quarter GDP growth of less than 1 per cent for the fourth consecutive quarter.
Though investment in the construction sector was activated, private consumption and exports were found to have continued their sluggish position between January and March. Private consumption inched up 0.6 per cent, a similar level to the 0.5 per cent growth during the fourth quarter of last year.
Later in the day, the Korea Development Institute said economic growth was still stuck at a low level, citing ongoing sagging performance in the export sector.
“Though private consumption is improving at a moderate pace, the overall economic growth is still low ― The slowdown in the global economy and weakened price competitiveness of Korean products are aggravating the export slump,” the state-controlled think tank said in its May research report.
The institute noted that overall export items, excluding mobile gadgets and semiconductors, reported declines in performance last month, adding that “export performance was lackluster in all of Korea’s major export destinations.”
KDI data showed that exports plunged 10.9 per cent in May on a year-on-year basis, while exports to the United States fell 7.1 per cent, widening from the on-year drop of 2.7 per cent in April. Exports of vessels dropped by 33.4 per cent, followed by petroleum products with 32.2 per cent, steel with 19.2 per cent and automobiles & auto components with 10 per cent.
Concerning the rebounding crude oil prices in the second quarter, the institute said, “Major oil forecasting institutions slightly revised up their oil price projections for 2015, but the price is expected to stay low, at $60 a barrel.”
