South Korea’s economy recorded its first technical recession since 2003 in the June quarter, as health restrictions from the coronavirus pandemic hammered economic activities and global demand.
Gross domestic product (GDP) decreased by a seasonally adjusted 3.3% in the June quarter, the central bank said on Thursday, after declining 1.3% in the previous quarter and much worse than a 2.3% contraction seen in a Reuters poll.
Exports of goods and services from the trade-reliant economy plunged 16.6%, logging the worst reading since the final quarter of 1963. That made up nearly 40% of the nation’s nominal GDP last year.
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Private consumption, which generates nearly half of the country’s GDP, however, rose 1.4% quarter-on-quarter, picking up from 6.5% decrease in the March quarter.
From a year earlier, the economy, Asia’s fourth-largest, shrank by 2.9% in the April-June period, sharply reversing a 1.4% expansion seen three months earlier and steeper than a 2.0% decline predicted in the poll.