ECONOMIC REPORT ON Q1 PERFORMANCE

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The economic report card on first quarter performance is out. Many people are still unable to palpably feel any recovery in business conditions but based on data, the central bank and government say the economy has recovered to pre-pandemic levels, fueled by both exports and domestic demand.

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Bank of Korea data shows South Korea’s GDP grew 1.6% in the first quarter. The result exceeds the less than one percent growth forecast by global investment banks and international organizations.

[Soundbite] Park Yang-soo(Bank of Korea) : "I said earlier that 1.3% first quarter growth would be a return to pre-pandemic　levels. But actual growth has posted 1.6%."

While exports of staple items such as semiconductors had spearheaded growth in the second half of last year, private consumption also played a significant role in this year’s first quarter. Outbound shipments rose 1.9% and facility investment such as in machines and transport equipment climbed 6.6% in Q1 compared to the previous quarter. Private consumption, which recorded zero growth in last year’s 3rd quarter and a contraction in the fourth, expanded by 1.1.% in the first quarter of this year. The government anticipates a mid-3 percent range economic growth for this year led by domestic demand and exports. But this could be hampered by another surge in COVID-19 infections. If the pandemic is prolonged and vaccinations face setbacks, it can take some time for domestic demand to recover.

[Soundbite] Jo Yeong-moo(LG Economic Research Institute) : "The Korean economy could expand close to 4% but an earnest recovery in consumer spending will likely take time as the general economic trend is led by exporting firms."

The government will draft measures to encourage spending in abidance of quarantine rules in order to continue the recovery momentum.