S. Korea's GDP grows 0.6 pct in Q2

South Korea's gross domestic product (GDP) grew faster in the second quarter as a faster drop in import than export lifted net export, indicating a recession-type growth, central bank data showed Tuesday.

The seasonally-adjusted real GDP, adjusted for inflation, gained 0.6 percent in the second quarter compared to the previous quarter, after rising 0.3 percent in the first quarter, according to the Bank of Korea (BOK).

Import plunged 4.2 percent in the April-June quarter on weaker demand for crude oil and natural gas, while export dipped 1.8 percent on lower demand for transport services and oil products.

The net export, or export minus import, was boosted by the faster fall in import than export, bolstering the overall GDP expansion.

Private consumption, another growth engine of the export-driven economy, shrank 0.1 percent in the second quarter after increasing 0.6 percent in the first quarter.

The BOK said consumption decreased especially in the lodging and eatery sector, hinting at the reduced effect from the lifting of measures against the COVID-19 pandemic.

Fiscal spending diminished 1.9 percent in the second quarter from three months earlier, marking the fastest decline in over 22 years since the fourth quarter of 2000.

Construction and facility investments slipped 0.3 percent and 0.2 percent each in the cited quarter.

Concerns remained over the South Korean economy, which faced a continued export slide and a slump in the real estate market.

The outbound shipment continued to decline for the ninth consecutive month through June on a yearly basis.

The real estate market was roiled by the higher borrowing costs. The BOK had left its policy rate unchanged at 3.50 percent since January after raising it by 3.0 percentage points for the past one and a half years.

Earlier this month, the country's finance ministry revised down this year's economic growth outlook to 1.4 percent from 1.6 percent estimated in December last year.

It was lower than the forecast of 1.5 percent from the Korea Development Institute (KDI), the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD).

By industry, the seasonally-adjusted production in the construction industry dwindled 3.4 percent in the April-June quarter compared to the previous quarter.

Production in the electricity, natural gas and tap water sector tumbled 6.0 percent in the second quarter, but those in the manufacturing and services industries gained 2.8 percent and 0.2 percent each.

Real gross domestic income was unchanged in the second quarter from the previous quarter due to the worsening terms of trade.