Q3 GDP Growth in South Korea Hits Five Year High with Strong Demand at Home
South Korea's economy has pushed the growth button. On Friday, estimates from the central bank revealed that the economy in the third quarter picked up pace that is the fastest in the last 5 years. The domestic demand has grown by leaps balancing the decline in exports.
The GDP or Gross domestic product increased at a seasonally adjusted rate of 1.2 percent in the July to September quarter compared to the Q2. It's a sharp rise from a 0.3 percent quarterly spike is the speediest since Q2 of 2010.
The remarkable turnaround in the economy is keeping away the possibilities of any interest rate cut in the near future. However, several of the economists opine that the Bank of Korea might still add some easing policy measures in case there is a further slip in the exports.
Kim Doo-un, an economist at Hana Financial Investment said, "Exports will likely worsen and that will force the authorities here to take additional action to keep the economic recovery from faltering."
In May, due to the spread of MERS in Korea the government had introduced provisional cuts in consumption tax and an additional budget. It has frightened away foreign tourists as well as the local shoppers. However, in July, the government declared that the virus no longer posed a threat.
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