The South Korean economy likely contracted in the final three months of last year due largely to a slowdown in exports and construction investment, a leading provider of economic analysis said Sunday.
In an earlier prediction, the Bank of Korea (BOK) said Asia's fourth-largest economy probably grew 3.1 percent in 2017 on the back of robust exports amid a global economic recovery, compared to a 2.8 percent growth in the previous year.
For the final quarter of last year, however, the economy shrank 0.2 percent from the previous three month period due to fewer working days over the long Chuseok holiday.
Moody's Analytics said the BOK's preliminary data to be released on Wednesday will match that forecast.
"The final estimate of gross domestic product (GDP) growth will likely remain unchanged at minus 0.2 percent quarter-on-quarter for the final stanza of 2017," the company said in a report. "The South Korean economy cooled more than expected at the end of last year, largely owing to weaker exports and construction investment, which both fell in quarter-ago terms."
But the report said the country is on its way to satisfy the BOK's growth outlook of 3 percent for 2018 on the back of strong exports and fiscal expansion.
"Still, South Korea's near-term growth prospects remain positive, as global growth is projected to remain solid in 2018, and the government's expansionary policies are likely to lift consumer spending," it said.
The South Korean government will inject some 4 trillion won (US$3.7 billion) into the economy through a supplementary budget in a bid to create more jobs and spur the economy. (Yonhap)