SEOUL, July 25 (Xinhua) -- The South Korean economy grew 0.8 percent in the second quarter, thanks to robust exports amid sluggish domestic demand, the South Korean central bank said Friday.
According to the estimation by the Bank of Korea (BOK), South Korea's real gross domestic product (GDP) gained 4.8 percent in the April-June period from a year ago, sharply down from a 5.8 percent growth in the first quarter.
"The growth of the local economy is slowing on lackluster domestic demand, but the pace of the slowdown seems to be considerably mild," said Choi Chun-sin, director of the BOK's economic statistics division. "The country is likely to see slowing domestic demand and robust exports for the time being."
Choi added that rising inflation is aggravating consumer sentiment and corporate profitability. Higher consumer inflation is lowering real income and raising household debts.
In early July, the BOK lowered growth forecast for the Korean economy this year to 4.6 percent from its earlier prediction, while expecting consumer inflation to hit a 10-year high of 4.8 percent.
"Except exports, the South Korean economy does not have strong momentum for growth. Domestic demand will likely remain sluggish in the second half," said Kim Jae-eun, an economist at Hana Daetoo Securities Co.
Exports of goods, which account for about 40 percent of South Korea's GDP, grew 3.7 percent in the second quarter from the previous three months, as overseas shipments of machinery and electronic goods went up, the BOK said.
Meanwhile private spending, another main factor of economic growth in South Korean economy, dropped 0.1 percent in the April-June period, after gaining 0.4 percent gain in the earlier quarter. Consumer spending contracted for the first time since it dropped 0.1 percent on-quarter in the April-June period of 2004, the BOK said.
Facility investment gained 1 percent in the second quarter, after falling 0.4 percent in the first quarter, and construction investment fell 0.6 percent, compared with 1.4 percent drop in the previous three months, the BOK added.
