The South Korean economy expanded slower than earlier estimated in the third quarter, as exports fell and domestic demand weakened, Yonhap News reported quoting a report from the central bank Tuesday.
The country's gross domestic product (GDP) expanded a revised 0.5 percent from a quarter earlier in the July-Sept. period, slightly lower than an earlier estimate of 0.6 percent, according to the Bank of Korea (BOK).
Compared with a year earlier, Asia's fourth-largest economy grew a revised 3.8 percent, also lower than an earlier estimate of 3.9 percent.
GDP, the broadest measure of economic performances, is the total value of goods and services produced within the economy in a given period.
The central bank said economic growth for the year may fall short of its earlier estimate of 4.4 percent as the global financial crisis has hit the export-driven economy harder than expected, further dampening domestic demand.
"South Korea's economy may grow below 3 percent in the fourth quarter, missing the central bank's growth forecast of 4.4 percent for the whole year," Jung Yung-taek, head of the central bank's national income team, was quoted as saying.
Exports of goods, which account for more than half of the country's GDP, fell 1.9 percent on-quarter, compared with a 4.3-percent on-quarter gain the previous quarter.
Private spending, one of the main growth engines of the South Korean economy, edged up 0.1 percent from the preceding quarter.
Facility investment gained 2.1 percent from the previous quarter, according to the central bank.
South Korea's real gross national income (GNI), reflecting the actual purchasing power of the population, dipped 3.7 percent in the third quarter, as terms of trade worsened amid soaring costs of raw materials. It fell by the biggest margin since the Jan.-March period of 1998 when GNI dipped 9.6 percent, according to the bank.
Economists said the weak growth readings could provide room for the BOK to reduce its key rates at next week's rate-setting meeting.
The central bank lowered its benchmark interest rate to 4 percent earlier last month, the third reduction in one month and the most aggressive round of easing in a decade.
The bank is widely expected to make additional cuts, as the country's economy is heading for its first recession in a decade.
The economy is faltering as the global recession undermines overseas sales. South Korean exports suffered their biggest drop in seven years, a government report showed Monday. Shipments to China, the nation's biggest overseas market, tumbled 27.8 percent.
South Korea is pumping funds into its financial system, cutting taxes, boosting public spending and slashing interest rates to support the economy.
"The figures show that the economic slump is accelerating at a faster-than-expected pace," said Kwon Sun-woo, a researcher at Samsung Economic Research Institute. "More steps to boost the economy should be taken."