The South Korean economy slowed down slightly in the second quarter from three months earlier due mainly to sluggish facility and construction investment, central bank data showed Thursday.
In the April-June period, Asia's fourth-largest economy posted a 0.7 percent on-quarter gain, contracting from a 1 percent rise in the first quarter, according to preliminary data from the Bank of Korea (BOK).
From a year earlier, the country expanded 2.9 percent over the three-month period.
For the first six months of the year, the South Korean economy grew 2.85 percent, slightly lower than the BOK's first-half growth target of 2.9 percent released earlier this month.
The central bank cut its 2018 growth forecast by 0.1 percentage point to 2.9 percent, with a 2.9 percent growth for the first half and 2.8 percent for the second half.
"Quarterly growth of 0.7 percent is in line with South Korea's growth potential of the annual 2.8-2.9 percent range," Park Yang-su, director general of the BOK economic statistics department, said in a briefing. "If we pull off around 0.82-0.94 percent growth in the third and fourth quarters, we will comfortably meet the 2.9 percent target."
But downside risks, such as intensifying trade disputes between the United States and China, will weigh heavily on the South Korean economy, he added.
The central bank said that facility investment fell 6.6 percent in the second quarter, marking the lowest quarterly growth since the first three months of 2016, when it tumbled 7.1 percent.
On the back of brisk overseas sales of semiconductors, facility investment has pulled off a steady expansion for years, spearheading a 3.1 percent gain of the South Korean economy last year.
"Entering the second quarter, companies started to adjust their investment following sharp expansion in previous quarters," said the BOK official. "Display panel makers held off their investment schedules mainly because of a global oversupply of LCD panels, and chipmakers have adjusted the pace of their machinery purchases."
At the same time, construction investment contracted 1.3 percent due to decreased building construction and civil engineering amid the government-led measures to cool down the real estate market.
Private consumption edged up to a six-quarter low of 0.3 percent, down from a 0.7 percent rise in the previous quarter, while government spending advanced to a 13-quarter low of 0.3 percent over the cited period.
Exports -- one of the major pillars of the South Korean economy -- advanced 0.8 percent from the first three months of 2018, but imports decreased 2.6 percent due to a drop in machinery and transportation equipment.
Gross domestic income retreated 0.8 percent in April through June vis-a-vis the previous quarter, swinging from a 1.8 percent gain three months earlier, the BOK said.
By sector, central bank data showed the agriculture and fishing industry decreasing 2.5 percent in the second quarter and the construction sector also contracting 2.3 percent, marking the lowest in almost six years.
But manufacturing and services rose 0.7 percent and 0.6 percent, respectively. (yonhap)