By Kim Jae-won
The nation's economy grew 0.7 percent from a quarter earlier in the period from April to June, with growth staying below 1 percent for three consecutive quarters on slowing exports, the Bank of Korea (BOK) said Tuesday.
The seasonally adjusted real GDP increased 0.7 percent, up from a 0.5 percent quarter-on-quarter increase in the first quarter. From a year earlier, GDP growth came in at 3.2 percent.
The increase from the first quarter reflects a series of government stimulus packages, including the extension of cuts in the special excise tax when buying a new car.
Gross domestic income (GDI) contracted 0.4 percent from a quarter earlier, the first fall in five years.
Economists said a rebound in corporate investment in facilities and stronger demand for new housing also attributed to the GDP growth spurt.
"Private consumption and investment were robust," said Mole Hau, an economist at BNP Paribas. "The former was underpinned by an extension of temporary tax incentives on car purchases while the latter was helped in part by the earlier surge in housing prices."
Private consumption went up 0.9 percent during the same period, while investment in the construction sector and facilities rose 2.9 percent, according to the BOK data.
Imports also jumped 1.9 percent in the second quarter, an upturn from a 3.1 percent decline three months ago. Exports, a major pillar of growth for Asia's fourth-largest economy, grew 0.9 percent.
But that does not mean that the country will see its economy continue to grow in the second half of the year. Hau said that Korea may face a couple of downside risks ranging from Brexit to the implementation of an anti-corruption law and corporate restructuring.
International organizations recommended the country push for strong labor reforms to gain growth momentum.
The International Monetary Fund (IMF) said that Korea needs to expand benefits for non-regular workers and reduce labor-market rigidity by introducing performance-based assessments of workers and clear conditions for dismissal.
"(That) would improve productivity and equity, with short-term costs alleviated by fiscal expansion," said the IMF in a paper.
Some analysts showed their concerns for growth as the country's GDP has expanded by less than 1 percent in the last three straight quarters, with 0.5 percent in the first quarter this year and 0.7 percent in the final quarter of 2015.
GDI also fell 0.4 percent from the previous quarter, worsening from a 3 percent rise three months earlier, the BOK said.
Market watchers said that the central bank may cut its key interest once more toward the end of the year as negative factors continue lingering on the economy.
The central bank lowered its key interest rate for the first time in a year to a record low of 1.25 percent in June from 1.5 percent.
Earlier this month, the BOK's seven-member Monetary Policy Board agreed unanimously to keep the rate unchanged, referring to increasing uncertainties at home and abroad caused by Britain's decision to leave the EU. Its next meeting is scheduled for Aug. 11.
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The seasonally adjusted real GDP increased 0.7 percent, up from a 0.5 percent quarter-on-quarter increase in the first quarter. From a year earlier, GDP growth came in at 3.2 percent.
The increase from the first quarter reflects a series of government stimulus packages, including the extension of cuts in the special excise tax when buying a new car.
Gross domestic income (GDI) contracted 0.4 percent from a quarter earlier, the first fall in five years.
Economists said a rebound in corporate investment in facilities and stronger demand for new housing also attributed to the GDP growth spurt.
"Private consumption and investment were robust," said Mole Hau, an economist at BNP Paribas. "The former was underpinned by an extension of temporary tax incentives on car purchases while the latter was helped in part by the earlier surge in housing prices."
Private consumption went up 0.9 percent during the same period, while investment in the construction sector and facilities rose 2.9 percent, according to the BOK data.
Imports also jumped 1.9 percent in the second quarter, an upturn from a 3.1 percent decline three months ago. Exports, a major pillar of growth for Asia's fourth-largest economy, grew 0.9 percent.
But that does not mean that the country will see its economy continue to grow in the second half of the year. Hau said that Korea may face a couple of downside risks ranging from Brexit to the implementation of an anti-corruption law and corporate restructuring.
International organizations recommended the country push for strong labor reforms to gain growth momentum.
The International Monetary Fund (IMF) said that Korea needs to expand benefits for non-regular workers and reduce labor-market rigidity by introducing performance-based assessments of workers and clear conditions for dismissal.
"(That) would improve productivity and equity, with short-term costs alleviated by fiscal expansion," said the IMF in a paper.
Some analysts showed their concerns for growth as the country's GDP has expanded by less than 1 percent in the last three straight quarters, with 0.5 percent in the first quarter this year and 0.7 percent in the final quarter of 2015.
GDI also fell 0.4 percent from the previous quarter, worsening from a 3 percent rise three months earlier, the BOK said.
Market watchers said that the central bank may cut its key interest once more toward the end of the year as negative factors continue lingering on the economy.
The central bank lowered its key interest rate for the first time in a year to a record low of 1.25 percent in June from 1.5 percent.
Earlier this month, the BOK's seven-member Monetary Policy Board agreed unanimously to keep the rate unchanged, referring to increasing uncertainties at home and abroad caused by Britain's decision to leave the EU. Its next meeting is scheduled for Aug. 11.
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